Transaction taxable income increase

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Reference no: EM1378121

Transaction Taxable Income Increase (Decrease) E&P Increase

1. Realized gain of $ 50,000 on involuntary conversion of building ($ 30,000 of gain is recognized)

2. Mining exploration costs incurred on 1st June of the current year; $24,000 is deductible from current-year taxable income

3. Sale of equipment to unrelated third party for $300,000; basis is $200,000 (no election out of installment method; no payments are received in the present year).

4. Dividends of $35,000 received from 5 percent-owned corporation, together with dividends received deduction (suppose taxable income limit does not apply).

5. Domestic production activities deduction of $55,000 is claimed in present year.

6. Section 179 expense deduction of $45,000 in current year.

7. Impact of present-year section 179 expense deduction for previous item in succeeding year.

8. MACRS depreciation of $80,000. ADS depreciation could have been $88,000.

9. Federal income taxes paid in the present year of $52,000

Reference no: EM1378121

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