For its 2012 tax year, Ilex Corporation has ordinary income of $240,000, a short

Question

For its 2012 tax year, Ilex Corporation has ordinary income of $240,000, a short-term

capital loss of $60,000, and a long-term capital gain of $20,000. Calculate Ilex

Corporation's tax liability for 2012.

Cedar Corporation has an S corporation election in effect. During the 2012 calendar tax year, the corporation had ordinary taxable income of $200,000, and on January 15, 2012, the corporation paid dividends to shareholders in the amount of $120,000. a) How much taxable income, in total, must the shareholders of the corporation report on their 2012 tax returns? b) Explain your answer.

Explanation / Answer

Tax liability = $240,000 ordinary income x 39% = $93,600.

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