Reference no: EM132959737

MM Corp. is an accrual basis taxpayer. This year the business earned taxable income of $240,000. The following additional information might be relevant in determining MM's ability to make distributions to shareholders:

Federal income tax liability                                                   45,000
Net operating loss carryover included in taxable income             10,000
Premiums paid on key employee life insurance                          17,000
Increase in cash surrender value of the life insurance                 4,000
Disallowed meals and entertainment expenses                           8,000
Capital loss carryforward included in taxable income                   9,000
Elected amount of new §179 expense this year                        20,000
MACRS depreciation excess over book depreciation                    14,000
Cash distributions to shareholders                                            36,000

Problem 1: Compute MM's current earnings & profits for the year