Principles Of Taxation For Business And Investment Planning 2020 Edition
23rd Edition
ISBN: 9781259969546
Author: Sally Jones, Shelley C. Rhoades-Catanach, Sandra R Callaghan
Publisher: McGraw-Hill Education
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Textbook Question
Chapter 8, Problem 29AP
This year, QIO Company generated $192,400 income from its routine business operations. In addition, it sold the following assets, all of which were held for more than 12 months. Compute QIO’s taxable income.
* Through date of sale.
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Students have asked these similar questions
This year, Sigma, Incorporated generated $637,500 income from its routine business operations. In addition, the corporation sold the
following assets, all of which were held for more than 12 months:
Initial
Basis
$ 165,200
110,800
Accumulated
Depreciation
$0
88,640
223,500
206,000
Marketable securities
Production equipment
Business realty:
Land
Building.
"Through date of sale.
Required:
a. Compute Sigma's taxable income assuming that it used the straight-line method to calculate depreciation on the building and has
no nonrecaptured Section 1231 losses.
b. Recompute taxable income assuming that Sigma sold the securities for $169,400 rather than $73,750.
Complete this question by entering your answers in the tabs below.
Sale Price
$ 73,750
38,000
0
61,800
236,750
231,000
Required A Required B
Compute Sigma's taxable income assuming that it used the straight-line method to calculate depreciation on the building and
has no nonrecaptured Section 1231 losses.
Taxable income
Lanco Corporation, an accrual-method corporation, reported taxable income of $1,460,000 this year. Included in the computation of taxable income were the following items:
MACRS depreciation of $200,000. Depreciation for earnings and profits purposes is $120,000.A net capital loss carryover of $10,000 from last year.A net operating loss carryover of $25,000 from last year.$65,000 capital gain from the distribution of land to the company’s sole shareholder (see below).Not included in the computation of taxable income were the following items:
Tax-exempt income of $5,000.Life insurance proceeds of $250,000.Excess current-year charitable contribution of $2,500 (to be carried over to next year).Tax-deferred gain of $20,000 on a like-kind exchange.Nondeductible life insurance premium of $3,500.Nondeductible interest expense of $1,000 on a loan used to buy tax-exempt bonds.Lanco’s accumulated E&P at the beginning of the year was $2,400,000. During the year, Lanco made the following…
Lanco Corporation, an accrual-method corporation, reported taxable income of $2,020,000 this year. Included in the computation of taxable income were the following items:
MACRS depreciation of $301,000. Depreciation for earnings and profits purposes is $193,000.
A net capital loss carryover of $20,100 from last year.
A net operating loss carryover of $26,500 from last year.
$60,600 capital gain from the distribution of land to the company’s sole shareholder (see below).
Not included in the computation of taxable income were the following items:
Tax-exempt income of $5,300.
Life insurance proceeds of $340,000.
Excess current-year charitable contribution of $2,600 (to be carried over to next year).
Tax-deferred gain of $27,700 on a like-kind exchange.
Nondeductible life insurance premium of $2,900.
Nondeductible interest expense of $2,100 on a loan used to buy tax-exempt bonds.
Lanco's accumulated E&P at the beginning of the year was $2,870,000. During the year, Lanco made the…
Chapter 8 Solutions
Principles Of Taxation For Business And Investment Planning 2020 Edition
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