Otter Corporation Reported Taxable Income of $500,000 from Operations for 20X3

Otter Corporation reported taxable income of $500,000 from operations for 20X3. The company paid federal income taxes of $139,500 on this taxable income. During the year, the company made a distribution of land to its sole shareholder, Emmet Jugg. The land's fair market value was $70,000 and its tax and E&P basis to Otter was $40,000. Emmet assumed a mortgage attached to the land of $11,000. The company had accumulated E&P of $1,000,000 at the beginning of the year. Compute Otter's total taxable income and federal income tax paid because of the distribution (assume a tax rate of 21 percent). Using your solution, compute Otter's current E&P for 20X3.