Sunapee Corporation reported taxable income of $740,000 from operations for 20X3. During the year, the company made a distribution of land to its sole shareholder, Jean McCarthy. The land's fair market value was $133,000 and its tax and E&P basis to Sunapee was $79,000. Jean assumed a mortgage attached to the land of $29,000. Sunapee's tax rate is 21 percent. Compute Sunapee's total taxable income and federal income tax paid because of the distribution. Using your solution, compute Sunapee's current E&P for 20X3.

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The Answer of Sunapee Corporation reported taxable income of $740,000 from operations for 20X3. During the year, the company made a distribution of land to its sole shareholder, Jean McCarthy. The land's fair market value was $133,000 and its tax and E&P basis to Sunapee was $79,000. Jean assumed a mortgage attached to the land of $29,000. Sunapee's tax rate is 21 percent. Compute Sunapee's total taxable income and federal income tax paid because of the distribution. Using your solution, compute Sunapee's current E&P for 20X3.

Sunapee Corporation Reported Taxable Income of $740,000 from Operations for 20X3