Reference no: EM13343144

-Pheasant Corporation ended its first year of operations with taxable income of $225,000. At the time of Pheasant's formation, it incurred $50,000 of organizational expenses. In calculating its taxable income for the year, Pheasant claimed an $8,000 deduction for the organizational expenses. What is Pheasant's current E & P?

a. $175,000.
b. $183,000.
c. $225,000.
d. $233,000.
e. None of the above.

- During the current year, Goose Corporation sold equipment for $500,000 (adjusted basis of $260,000). The equipment was purchased a few years ago for $560,000 and $300,000 in MACRS deductions have been claimed. ADS depreciation would have been $200,000. As a result of the sale, the adjustment to taxable income needed to determine current E & P is:

a. No adjustment is required.
b. Subtract $100,000.
c. Add $100,000.
d. Add $80,000.
e. None of the above.