Transactions Affecting E&P. For each of the following transactions, indicate whether a special adjustment must be made in computing R Corporation's current E&P. Answer assuming that E&P has already been adjusted for current taxable income. a. During the year, the corporation paid estimated Federal income taxes of $25,000 and estimated state income taxes of $10,000. b. The corporation received $5,000 of interest income from its investment in tax-exempt bonds. c. The corporation received a $10,000 dividend from General Motors Corporation. d. The corporation purchased machinery for $9,000 and expensed the entire amount in accordance with Code § 179. e. The corporation reported a § 1245 gain of $20,000. f. The corporation had a capital loss carryover of $7,000 from the previous year. This year the corporation had capital gains before consideration of the loss of $10,000.
Transactions Affecting E&P. For each of the following transactions, indicate whether a special adjustment must be made in computing R Corporation's current E&P. Answer assuming that E&P has already been adjusted for current taxable income. a. During the year, the corporation paid estimated Federal income taxes of $25,000 and estimated state income taxes of $10,000. b. The corporation received $5,000 of interest income from its investment in tax-exempt bonds. c. The corporation received a $10,000 dividend from General Motors Corporation. d. The corporation purchased machinery for $9,000 and expensed the entire amount in accordance with Code § 179. e. The corporation reported a § 1245 gain of $20,000. f. The corporation had a capital loss carryover of $7,000 from the previous year. This year the corporation had capital gains before consideration of the loss of $10,000.
SWFT Essntl Tax Individ/Bus Entities 2020
23rd Edition
ISBN:9780357391266
Author:Nellen
Publisher:Nellen
Chapter18: Comparative Forms Of Doing Business
Section: Chapter Questions
Problem 16P
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Transcribed Image Text:Transactions Affecting E&P. For each of the following transactions, indicate whether a special
adjustment must be made in computing R Corporation's current E&P. Answer assuming that E&P
has already been adjusted for current taxable income.
a. During the year, the corporation paid estimated Federal income taxes of $25,000 and
estimated state income taxes of $10,000.
b. The corporation received $5,000 of interest income from its investment in tax-exempt bonds.
c. The corporation received a $10,000 dividend from General Motors Corporation.
d. The corporation purchased machinery for $9,000 and expensed the entire amount in
accordance with Code § 179.
e. The corporation reported a § 1245 gain of $20,000.
f. The corporation had a capital loss carryover of $7,000 from the previous year. This year the
corporation had capital gains before consideration of the loss of $10,000.
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