Ordering of Deductions: Beta Corporation reports the following results for the c

Question

Ordering of Deductions: Beta Corporation reports the following results for the current year: Gross Income from Operations $180,000 Dividends from less-than-20 % owned domestic corporations $100,000 Operating Expenses $150,000 Charitable Contributions $20,000 In addition, Beta has a $50,000 NOL Carryover from the preceding tax year, and its qualified production activities income is $30,000.

a) What is Beta’s taxable income for the current year?

b) What carrybacks or carryovers are available to other tax years?

Explanation / Answer

a.

gross income 180000

- operating expenese (150000)

net operating incomr 30000

setoff from previous loss (30000)

other income 100000

total income $100000

deduction for contribution (20000)

Net taxable income $80000

b.

NOL will be carryover to next tax year is $20000

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