Compute hc inc current-year taxable income

Reference no: EM132725777

Problem 1: Compute HC Inc.'s current-year taxable income given the following information relating to its 2020 activities. Also, compute HC's Schedule M-1 assuming that HC's federal income tax expense for book purposes is $30,000.

Gross profit from inventory sales of $310,000 (no book-tax differences).
Dividends HC received from 28 percent-owned corporation of $120,000 (this is also HC's pro rata share of the corporation's earnings).
Expenses other than DRD, charitable contribution (CC), and net operating loss (NOL) are $300,000 (no book-tax differences).
NOL carryover from prior year of $12,000.
Cash charitable contribution of $50,000

Book income: book-tax Dif. Taxable Income
(50,000) 38,200 (11,800)

Problem 2: What calculation they do to come up with 38,200 for the charitable contributions?

Reference no: EM132725777

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