Determine taxable income in each of the following instances. Assume that the cor

Question

Determine taxable income in each of the following instances. Assume that the corporation is a C corporation and that book income is before any income tax expense.

Book income of $100,000 including capital gains of $4,000, a charitable contribution of $2,000, and travel and entertainment expenses of $6,000.

Book income of $184,000 including capital losses of $6,000, a charitable contribution of $24,000, and travel and entertainment expenses of $6,000.

Book income of $152,000 including municipal bond interest of $4,000, a charitable contribution of $10,000, and dividends of $6,000 from a 10% owned domestic corporation. The corporation also has a $16,000 charitable contribution carryover.

Book income of $258,000 including municipal bond interest of $4,000, a charitable contribution of $10,000, and dividends of $14,000 from a 70% owned domestic corporation. The corporation has a capital loss carryover of $12,000 and a capital gain of $5,000 in the current year.

Explanation / Answer

A. Taxable income = $100000+($6000 * 50%) = $ 103000

B. Taxable income = $184000+ $6000 + ($6000 * 50%) + $2300 = $ 195300

C. Taxable income = $152000- $4000( not taxable bond interest income) - ($6000 * 70%) - $ 5380 = $ 138420

D. Taxable income = $258000 - $4000( not taxable bond interest income) - ($14000 * 80%) - $ 5000 (Capital loss carry forward to detoff current year gain) = $ 237800

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