Golf Corporation (GC), a calendar-year, accrual-method corporation, held its directors' meeting on December 15 of year 1. During the meeting the board of directors authorized GC to pay a $75,000 charitable contribution to the World Golf Foundation, a qualifying charity. Note: For all requirements, leave no answer blank. Enter zero if applicable and select "Not applicable" if no effect. b. If GC actually pays $50,000 of this contribution on January 15 of year 2 and the remaining $25,000 on or before April 15 of year 2, what book–tax difference will GC report in year 2 (assume the income limit does not apply)? Is it favorable or unfavorable?

Golf Corporation (GC), a calendar-year, accrual-method corporation, held its directors' meeting on December 15 of year 1. During the meeting the board of directors authorized GC to pay a $75,000 charitable contribution to the World Golf Foundation, a qualifying charity. Note: For all requirements, leave no answer blank. Enter zero if applicable and select "Not applicable" if no effect. b. If GC actually pays $50,000 of this contribution on January 15 of year 2 and the remaining $25,000 on or before April 15 of year 2, what book–tax difference will GC report in year 2 (assume the income limit does not apply)? Is it favorable or unfavorable?

SWFT Corp Partner Estates Trusts

42nd Edition

ISBN:9780357161548

Author:Raabe

Publisher:Raabe

Chapter15: Exempt Entities

Section: Chapter Questions

Problem 40P

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Golf Corp (GC), a calendar-year, accrual method corporation, held its directors’ meeting on December 15 of year 1. During the meeting, the board of directors authorized GC to pay a $75,000 charitable contribution to the World Golf Foundation, a quality charity. If GC actually pays $50,000 of this contribution on Jan 15 of yar 2 and remaining $25,000 on or before April 15 of year 2, what book-tax difference will it report associated with the contribution in year 1 (ASSUME THE 10 PRCENT LIMITATION DOES NOT APPLY)? Is it favorable or unfavorable? Is it permanent or temporary? Assume the same facts as in part (a) what book tac difference will GC report in year 2 (ASSUME THE 10 PRCENT LIMITATION DOES NOT APPLY)? Is it favorable or unfavorable? If GC actually pays $50,000 of this contribution on Jan 15 of yar 2 and remaining $25,000 on May 15 of year 2, what book-tax difference will it report associated with the contribution in year 1 (ASSUME THE 10 PRCENT LIMITATION DOES NOT APPLY)? Is it…
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In 2022, OCC Corporation made a charitable donation of $400,000 to the International Rescue Committee (a qualifying charity). For the year, OCC reported taxable income of $1,500,000 before deducting any charitable contributions, before deducting its $20,000 dividends-received deduction, and before deducting its $40,000 NOL carryover from last year. Required: a. What amount of the $400,000 donation is OCC allowed to deduct for tax purposes in 2022, what is the carryover to 2023, and when does the carryover expire? b. Assume that in 2023, OCC did not make any charitable donations and that it is allowed to deduct its full charitable contribution carryover, if any, from 2022. What book-tax difference associated with the charitable contributions will OCC report in 2023? Is the difference favorable or unfavorable? Is it permanent or temporary? Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Required A Required B What amount of…
In 2022, OCC Corporation made a charitable donation of $400,000 to the International Rescue Committee (a qualifying charity). For the year, OCC reported taxable income of $1,500,000 before deducting any charitable contributions, before deducting its $20,000 dividends-received deduction, and before deducting its $40,000 NOL carryover from last year. Required: a. What amount of the $400,000 donation is OCC, allowed to deduct for tax purposes in 2022, what is the carryover to 2023, and when does the carryover expire? b. Assume that in 2023, OCC did not make any charitable donations and that it is allowed to deduct its full charitable contribution carryover, if any, from 2022. What book-tax difference associated with the charitable contributions will OCC report in 2023? Is the difference favorable or unfavorable? Is it permanent or temporary? Complete this question by entering your answers in the tabs below. Required A Required B What amount of the $400,000 donation is OCC allowed to…
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3. During the current year, 2023, Gray Corporation, a C corporation in the financial services business, made charitable contributions to qualified organizations as follows: -Stock (basis of $20,000, fair market value of $45,000) in Drab Corporation, held for six months as an investment, to the Salvation Army. (Salvation Army plans on selling the stock.) -Painting (basis of $90,000, fair market value of $250,000), held for four years as an investment, to the Museum of Fine Arts. (The Museum plans to use the painting in its exempt function by including the painting in its collection). Gray Corporation's taxable income (before any charitable contribution deduction) is $1,800,000. What is the total amount of Gray's charitable contributions for the year? a. $110,000. b. $135,000 c. $270,000 d. $295,000
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