PWD Incorporated is an Illinois corporation. It properly included, deducted, or

Question

PWD Incorporated is an Illinois corporation. It properly included, deducted, or excluded the following items on its federal tax return in the current year:

PWD's Federal Taxable Income was $113,000. Calculate PWD's Illinois state tax base.

a. $128,961.

b. $143,950.

c. $144,286.

d. $177,710.

Item Amount Federal Treatment Illinois Income Taxes $ 33,424 Deducted on federal return Indiana Income Taxes $ 18,435 Deducted on federal return Ohio Commercial Activity Tax $ 3,974 Deducted on federal return Illinois Municipal Bond Interest $ 9,948 Excluded from federal return Indiana Municipal Bond Interest $ 15,325 Excluded from federal return Federal T-Note Interest $ 2,474 Included on federal return

Explanation / Answer

Illinois state tax base = Federal taxable income+Indiana income taxes+Illinois income taxes+Indiana municipal bond interest – federal t-note interest

= 113,000+18,435+33,424+15,325-2,474

= 177,710

Hence the answer is option “d”.

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