Homework Answers
Calculation of corporation's 2019 taxable income
Operating Income = $315,000
Dividend Income = $80,000
Long-term capital gains = Gain in 2019 - loss from 2018 = $55,000 - $15,000 = $40,000
Short term capital gain = $20,000
Adjusted gross income = $315,000 + $80,000 + $40,000 + $20,000 = $455,000
Less: Charitable contribution for cash plus charitable contribution c/f from 2016 = $30,000 + $20,000 = $50,000
Taxable Income = $455,000 - $50,000 = $ 405,000
With the recent tax update, NOL after December 31st, 2017 is allowed
$365,000 is taxed at 21% and long term capital gain pf $40,000 is taxed at 15% as per its taxable income.
$365,000 @21% = $76,650
$40,000 @ 15% = $ 6,000
Tax liability = $82,650
Tax already paid = $70,000
Remaining tax liability = $12,650
No carry forwards available for next year.
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