Fallow Corporation is subject to tax only in State X. Fallow generated the following income and deductions. State income taxes are not deductible for X income tax purposes. Sales $4,000,000 Cost of sales 2,800,000 State X income tax expense 200,000 Depreciation allowed for Federal tax purposes 400,000 Depreciation allowed for state tax purposes 250,000 Interest income on Federal obligations 40,000 Interest income on X obligations 30,000 Expenses related to carrying X obligations 2,000 hat is the State X income tax base? Assume that interest on X obligations is exempt from X income tax.
Fallow Corporation is subject to tax only in State X. Fallow generated the following income and deductions. State income taxes are not deductible for X income tax purposes. Sales $4,000,000 Cost of sales 2,800,000 State X income tax expense 200,000 Depreciation allowed for Federal tax purposes 400,000 Depreciation allowed for state tax purposes 250,000 Interest income on Federal obligations 40,000 Interest income on X obligations 30,000 Expenses related to carrying X obligations 2,000 hat is the State X income tax base? Assume that interest on X obligations is exempt from X income tax.
SWFT Essntl Tax Individ/Bus Entities 2020
23rd Edition
ISBN:9780357391266
Author:Nellen
Publisher:Nellen
Chapter12: Corporations: Organization, Capital Structure, And Operating Rules
Section: Chapter Questions
Problem 2BD
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Question
Fallow Corporation is subject to tax only in State X. Fallow generated the following income and deductions. State income taxes are not deductible for X income tax purposes.
|
Sales |
$4,000,000 |
|
Cost of sales |
2,800,000 |
|
State X income tax expense |
200,000 |
|
|
400,000 |
|
Depreciation allowed for state tax purposes |
250,000 |
|
Interest income on Federal obligations |
40,000 |
|
Interest income on X obligations |
30,000 |
|
Expenses related to carrying X obligations |
2,000 |
hat is the State X income tax base? Assume that interest on X obligations is exempt from X income tax.
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