Question

ASSUME ALL CORPORATIONS ARE C CORPORATIONS

Calculate taxable income from the given facts:
Net income per books-130,000
Federal income tax expense 30,000
Charitable contribution disallowed=3,000
net capital loss -5,000

Answer 1

Note: The problem has been solved in two assumpiton

1. Assuming Federal tax has not deducted to arrive Net income per book

2. Assuming Federal tax has been deducted to arrive Net income per book

Question: ASSUME ALL CORPORATIONS ARECCORPORATIONS Calculate taxable income from the given facts Net income per books-130,000 Federal income tax expense 30,000 Charitable contribution disallowed 3,000 net capital loss-5,000 Assumption 1: Considered as Federal income tax expenses not deducted to arrive Net income per book: Solution: Particulars Net income per books 1,30,000 Add: Charitable contribution disallowed 3,000 Taxable Income 1,33,000 Ccorporations Deduot Capital Losses: Unlike regular corporate expenses, which are deducted from the corporation's ordinary income. C corporation capital losses may not be deducted from a C corporation's ordinary income; capital losses may only be offset against capital gains If in any given tax year, a C corporation's capital losses exceed its capital gains, the excess loss may not be deducted in that year. Instead, the current year's excess loss is carried to other tax years in a specific order and deducted from net capital gains in those years (if any gains exist)

Assumption 2: Considered as Federal income tax expenses has been deducted to arrive Net income per book: Particulars Net income per books 1,30,000 Add: Charitable contribution disallowed 3,000 Add: Federal inoome tax expense 30,000 Taxable Income 1,63,000 Ccorporations Deduct Capital Losses: Unlike regular corporate expenses, which are deducted from the corporation's ordinary income, C corporation capital losses may not be deducted from a C corporation's ordinary income; capital losses may only be offset against capital gains If in any given tax year, a C corporation's capital losses exceed its capital gains, the excess loss may not be deducted in that year. Instead, the current year's excess loss is carried to other tax years in a specific order and deducted from net capital gains in those years lif any gains exist)