Yellow Corporation, a calendar-year taxpayer, made estimated tax payments of $40,000 for 2020 ($10,000 per quarter). Yellow filed its Federal income tax return for 2020 reflecting a tax liability of $15,000. Due to its overpayments, Yellow received a $25,000 refund in 2021. What is the impact on Yellow Corporation's E & P of the payment of estimated taxes and the receipt of the Federal income tax refund?
Yellow Corporation, a calendar-year taxpayer, made estimated tax payments of $40,000 for 2020 ($10,000 per quarter). Yellow filed its Federal income tax return for 2020 reflecting a tax liability of $15,000. Due to its overpayments, Yellow received a $25,000 refund in 2021. What is the impact on Yellow Corporation's E & P of the payment of estimated taxes and the receipt of the Federal income tax refund?
Chapter5: Corporations: Earnings & Profits And Dividend Distributions
Section: Chapter Questions
Problem 29P
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See Attached 5-29
![Problem 5-29 (LO. 2)
Yellow Corporation, a calendar-year taxpayer, made estimated tax payments of $40,000 for 2020 ($10,000 per quarter). Yellow filed its
Federal income tax return for 2020 reflecting a tax liability of $15,000. Due to its overpayments, Yellow received a $25,000 refund in 2021.
What is the impact on Yellow Corporation's E & P of the payment of estimated taxes and the receipt of the Federal income tax refund?
To compute Yellow's E & P for 2020, the $40,000 for Federal income taxes paid would be
E & P for 2021, Yellow Corporation would
taxable income. To compute
$25,000 to taxable income to reflect the Federal income tax refund.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F0eebff4d-3f7f-4bad-9401-b87ebc980577%2F938ecfd9-3606-436b-bfef-0dac7d17ff04%2Ful7nsiy_processed.png&w=3840&q=75)
Transcribed Image Text:Problem 5-29 (LO. 2)
Yellow Corporation, a calendar-year taxpayer, made estimated tax payments of $40,000 for 2020 ($10,000 per quarter). Yellow filed its
Federal income tax return for 2020 reflecting a tax liability of $15,000. Due to its overpayments, Yellow received a $25,000 refund in 2021.
What is the impact on Yellow Corporation's E & P of the payment of estimated taxes and the receipt of the Federal income tax refund?
To compute Yellow's E & P for 2020, the $40,000 for Federal income taxes paid would be
E & P for 2021, Yellow Corporation would
taxable income. To compute
$25,000 to taxable income to reflect the Federal income tax refund.
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