Question

I need help how to calculate federal income tax ??????/

Olive Corporation was formed and began operations on January 1, 2018. The corporation's income statement for the year and the balance sheet at year-end are presented below.

The Olive Corporation Income Statement
for the Year Ended December 31, 2018Gross income from operations$270,000Qualified dividends received from a 35
percent-owned domestic corporation20,000Total gross income$290,000Cost of goods sold(110,000)Total income$180,000Other expenses:Compensation of officers$77,000

Salaries and wages30,000

Bad debts (direct charge-offs)9,000

Repairs3,000

Depreciation for book and tax purposes10,000

Advertising2,000

Payroll taxes16,000

Total other expenses(147,000)Net income (before federal income tax expense)$33,000The Olive Corporation Balance Sheet
as of December 31, 2018Assets:Cash$30,000

Accounts receivable20,000

Inventory (at cost)70,000

Equipment90,000

Less: accumulated depreciation(10,000)

Total assets

$200,000Liabilities and owners' equity:
Accounts payable$ 6,200

Note payable (due in 10 years)85,000

Common stock80,000

Retained earnings28,800
Total liabilities and owners' equity$200,000

I

Answer 1

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Form 1120 CTYPE PRINT S Deductions (See Instructions for limitations on deductions.) U.S. Corporation Income Tax Return OMB No 1545-0123 For calendar year 2018 or tax year beginning 2018, ending 2018 Go to www.irs.gov/Form1 120 for instructions and the latest information Name B Employer identification number OLIVER CORPORATION Number street and room or suite ne. Ma P.O.Boxe instructions Date incorporated JOR JANUARY 1. 2018 City or town, state or province, country, and ZIP or foreign postal code D Total assets instructions 200000 Schedule M-Stached O E Check it (1) Initial retum 1 2 Finalreum 1 Name charge 141 Address change 1a Gross receipts or sales, . . . . . . . .. . 1a 270000 b Returns and allowances. . . . . . . 9 000 267000 Balance Subtract line 1b from line . . . . . 2 Cost of goods sold attach Form 1125-A). . . . . . . . . . . . . 2 151000 3 Gross profit. Subtract line 2 from line 1o. . 4 Dividends and inclusions (Schedule C, line 23, column (al. . . . . . . . . . . 4 5 Interest . . . . . . . 6 Grossrents . . . . . . . . . . . . . . . . . . . . . . . 7 Gross royalties . . . . . . 8 Capital gain net income (attach Schedule D Form 11200. chedule D Form 11208 - . . . . . . . . . . . . . . . 9 Net gain or loss from Form 4797, Part II, line 17 (attach For 4797) . . . . . . . . 10 Other income (see instructions-attach statement). . . . 11 Total income. Add lines through 10 . . . . . 204000 12 Compensation of officers (see instructions-attach Form 1125-E . . . . 77000l . 13 Salaries and wages less employment credits . . . . . . . . . . . . . . . 14 Repairs and maintenance . . . . . . . . . . . . . . . . . . . 3000 Bad debts . . . . . . . . . . . . . . . . . . . . . . . . . . 16 Rents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 Taxes and licenses 16000 . . . . . . . . 18 Interests instructions) . . . . . . . 19 Charitable contributions Depreciation from Form 4562 not claimed on Form 1125-A or elsewhere on return (attach Form 4562). 21 Depletion . . . . . . . . . . . . . . . . . . . . . . . . . 22 Advertising . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 Pension profit sharing, etc., plans . . . . . . . . . . . . . . 24 Employee benefit programs . . . . . . . . 25 Reserved for future use. . . . . . . . . . . . . . . . . . . . . . . . . 25 8 26 Other deductions (attach statement) . . . . . . . . . . . . . 27 Total deductions. Add lines 12 through 26. . . . . 27 147000) 28 Taxable income before net operating loss deduction and special deductions. Subtract line 27 from line 11. 28 29a Net operating loss deduction isce instructions), . . . . . . . 29a b Special deductions (Schedule C, line 24, column ich . 29b 1 3000 Add lines 29a and 29 . . . 11000 . . . . . . . . . . . . . . . . . . . . 29 30 Taxable income. Subtract line 29c from line 28. See Instructions . . . . . . . . . . 30 44000 31 Total tax (Schedule, Part I line 11). 9240 ability paid Schedule J. Part II line 12). . . . . . . . . . . . . . . Total payments, credits, and section 965 net tax liability (Schedule J. Part line 23). . . . . . . 33 0 Estimated tax penalty. See instructions. Check if Form 2220 is attached . . . . 34 $ 35 Amount owed. I line 33 is smaller than the total of lines 31, 32, and 34, enter amount owed . . 36 Overpayment. If line 33 is larger than the total of lines 31, 32, and 34, enter amount overpaid. Enter amount from line 36 you want: Credited to 2019 estimated tax Refunded 37 Under per of perjury, I declare that I have r ead this return, including companying schedules and st a nd to the best of my knowledge and build It is the correct and complete. Declaration of prepare ther than Sign spayer les boned on all information of which preparar has any knowledge. May the discuss this retum --1--1---23:21= 212 213 2 2 3 1 21 21 |2|3 e o en la . .. 35 9240

Form 110 2016 Schedule C Dividends, Inclusions, and Special Deductions (see instructions 1 Dividends from less than 20%-owned domestic corporations other than debt financed Denda NS 2 Dudiends from 20%-or-more-owned domestic corporations other than de financed 3 Dividends on certain debt financed stock of domestic and foreign corporations .. 4 Dividends on certain preferred stock of less than 20%-owned public utilities ... 5 Dividends on certain pr e dstock of 20%-or-more-owned public utilities.. . . 6 Dividends from less than 20%-owned foreign corporations and certain FSCS... 7 Dividends from 20%-or-more-owned foreign corporations and certain FSCS ... & Dividends from wholly owned foreign subsidiaries . . . . . . . . . . . 9 10 Subtotal. Add lines 1 though. See Instructions for limitations. . . . . Dividends from domestie corporations received by a small business Investment company operating under the Small Business Investment Act of 1958 . . . . 11 Dividends from alted group members. . . . . 12 13 Dividends from certain FSCS . . Foreign-source portion of dividends received from a specified 10%-owned foreign corporation (excluding hybrid dividends) se instructions . . . . . . . . . Dividends from foreign corporations not included on line 3, 6, 7, 8, 11, 12, or 13 including any hybrid dividends. . 14 15 Section 651) Inclusion. . . . . . . . . . . . . . 16a Subpart F inclusions derived from the sale by a controlled foreign corporation (CFC) of the stock of a lower fier foreign corporation treated as a dividend attach Formis) 5471) instructions Subpart inclusions derived from hybrid dividends of tired corporations attach Formis 5471) see instructions . . . . . . . . . . . . Other inclusions from CFCs under subpart not included on line 15, 16, 18, or 17 attach Forms 5471) see instructions. . . . . . . . . . . . . . . 17 Global Intangible Low Taxed Income (GILT (attach Forms 5471 and Form 1992) 18 Gross up for foreign taxes deemed paid - - - - - - - - - 19 IC DISC and former DSC dividends not included on line 1.2 or 3 - - Other dividends - - - - - - - - - - 21 Deduction for dividends paid on certain preferred stock of public utilities .... 22 23 Section 250 tonnach Form 1999) Total dhidiends and inclusions Adid lines - - - - - - - - - - - - through 20. Enter here and on page 1. 24 Total special deductions. Addnes through 22 column c Enter there and on page 1. line 295 Form 1120 2018

THE DIVIDENDS RECEIVED HAVE A DEDUCTION PERCENTAGE OF 65%, THAT´S WHY THE SPECIAL DEDUCTIONS AMOUNT 13000.

THE INCOME TAX (9240) IS OBTAINED BY MULTIPLYIING THE TAXABLE INCOME ON LINE 30 BY 21%, WHICH IS THE TAX RATE FOR CORPORATIONS.

HOPE YOU FIND THIS USEFUL!!