Response to the following problem:
In the following independent situations, indicate the effect on taxable income and E & P, stating the amount of any increase (or decrease) that occurs as a result of the transaction.
Assume E&P has already been increased by taxable income. -Taxable Income Increase (Decrease) -E&P Increase This is the transaction
1. Realized gain of $50,000 on involuntary conversion of building ($30,000 of gain is recognized)