Green Corporation, a closely held operating corporation, reports the following: Taxable income &nbsp

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Question

Green Corporation, a closely held operating corporation, reports the following: Taxable income &nbsp

Green Corporation, a closely held operating corporation, reports the following:

Taxable income $100,000

Long-term capital gain 130,000

Dividends-received deduction 120,000

Federal income taxes on long-term capital gain compute

Accumulated earnings credit 120,000

Federal income taxes compute

Calculate Green's accumulated taxable income

business accounting

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Answer 1

Answer #1

SOLUTION:

Taxable income	100,000
Plus: dividends - received deduction	120,000
Minus: LTCG (net of taxes)*	-73,200
120,000 * 0.39% = 46,800; 120,000 - 46,800 = 73,200
Minus: Accumulated earnings credit	-120,000
Minus: Federal income taxes	-22,150
Accumulated taxable income	4,650

120,000 0.39% = 46,800; 120,000 - 46,800 = 73,200
**Tax on first $100,000 of taxable income: 22,150

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Answer 2

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