Reference no: EM132652721

Jonathan Corporation, a calendar year and accrual method taxpayer, provides the following information and asks you to prepare Schedule M-1 for 2019.

Net income per books (after-tax) $386,250 Federal income tax per books       30,050
Tax-exempt interest income                                                                    5,000
Life insurance proceeds received as a
result of death of corporate president                                                   300,000
Nondeductible penalties                                                                         2,500
Interest on loan to purchase tax-exempt bonds                                         1,700
Excess of capital losses over capital gains                                                5,300
Premiums paid on life insurance policy on life of
Eagle's president                                                                                 4,200
Excess of tax depreciation over book depreciation                                      3,000

The following information for 2019 relates to Garrett Corporation, a calendar year, accrual method taxpayer.

Net income per books (after-tax)    $174,100                                                                                                                          Federal income tax per books      86,600
Tax-exempt interest income    4,500
MACRS depreciation in excess of straight-line
depreciation used for financial accounting
purposes                                    7,200
Excess of capital loss over capital gains 9,400
Non-deductible meals and entertainment 5,500
Interest on loan to purchase tax-exempt bonds 1,100

Question 1: Based on the above information, use M-1 of Form 1120, which is available on the IRS website, to determine Garrett Corporation's taxable income for 2019.