Ozark Corporation reported taxable income of $500,000 from operations for year 1.During the year, the company made a distribution of land to its sole shareholder, Marcus Twain.The land's fair market value was $100,000 and its tax and E&P basis to Ozark was $125,000.Marcus assumed a mortgage attached to the land of $25,000.The company had accumulated E&P of $850,000 at the beginning of the year.Compute Ozark's total taxable income and federal income tax paid as a result of the distribution.Using your solution, compute Ozark's accumulated E&P at January 1, year 2.

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The Answer of Ozark Corporation reported taxable income of $500,000 from operations for year 1.During the year, the company made a distribution of land to its sole shareholder, Marcus Twain.The land's fair market value was $100,000 and its tax and E&P basis to Ozark was $125,000.Marcus assumed a mortgage attached to the land of $25,000.The company had accumulated E&P of $850,000 at the beginning of the year.Compute Ozark's total taxable income and federal income tax paid as a result of the distribution.Using your solution, compute Ozark's accumulated E&P at January 1, year 2.

Ozark Corporation Reported Taxable Income of $500,000 from Operations for Year