Solution-Determine the corporations tax liability and

Determine the corporations tax liability and carry-forward

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Reference no: EM131760623

G Corp. is not eligible for the small corporation AMT exemption. G Corp. is an accrual basis taxpayer with the following taxable income and tax liability:

Gross profit from sales		$3,000,000
Dividends from 25% owned corporations		100,000
Dividends from 10% owned corporations		200,000
Gain on installment sale of land		250,000
Gross income		$3,550,000

Operating expenses	$1,750,000
Depreciation expense	400,000
Organizational cost amortization expense	25,000
DRD (80,000 + 140,000)	220,000

Total deductions		$2,395,000

Taxable income		1,555,000
Tax		392,700

Additional information:

1. Tax-exempt interest = $80,000. The bonds are private activity bonds.

2. Key person life insurance proceeds = 500,000

3. Total gain related to installment sale made last year = 770,000. $250,000 reported this year.

4. Depreciation for AMT = 325,000 and for ACE = 330,000

5. Net AMT paid in past years = 100,000. Cumulative prior period positive ACE adjustment = $200,000

Determine the corporation's tax liability and carry-forward items.

Reference no: EM131760623

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Determine the corporations tax liability and carry-forward

Reference no: EM131760623

Reference no: EM131760623

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