Question - Jade Corporation (a calendar year, accrual basis taxpayer) had the following transactions during 2010, its second year of operation.
Taxable income $330,000
Federal income tax liability paid 112,000
Interest income from tax-exempt payors 5,000
Meals and entertainment expenses (total) 3,000
Premiums paid on key employee life insurance 3,500
Increase in cash surrender value attributable to life insurance premiums 700
Proceeds from key employee life insurance policy130,000
Cash surrender value of life insurance policy at distribution 20,000
Excess of capital losses over capital gains 13,000
MACRS deduction 26,000
Straight-line depreciation using ADS lives 16,000
Section 179 expense elected during 2007 100,000
Organizational expenses incurred in 2007 14,000
Dividends received from domestic corporations (less than 20% owned) 25,000
Jade uses the LIFO inventory method, and its LIFO recapture amount increased by $10,000 during 2010. In addition, Jade sold property on installment during 2009. The property was sold for $40,000 and had an adjusted basis at sale of $32,000. During 2010, jade received a $15,000 payment on the installment sale. Finally, assume that Jade elected to amortize qualified organizational expenses in 2009. Compute Jade Corporation's current E&P.