X Corporation is a cash method, calendar year taxpayer. During the current year, X has the following income and expenses: Gross Profits from sales 20,000 Salaries paid to employees 10,250 Tax-exempt interest received 3,000 Dividends received from IBM 5,000 Depreciation (X purchased 5-year property in the current year for 7,000; assume the property was fully expensed under rule 168(k)) 7,000 LTCG on sale of stock 2,500 LTCL on sale of stock 5,000. LTCL carryover from prior years 1,000 Estimated fed. income taxes paid 800 Determine X's taxable income for the current year and its current earnings and profits.
X Corporation is a cash method, calendar year taxpayer. During the current year, X has the following income and expenses: Gross Profits from sales 20,000 Salaries paid to employees 10,250 Tax-exempt interest received 3,000 Dividends received from IBM 5,000 Depreciation (X purchased 5-year property in the current year for 7,000; assume the property was fully expensed under rule 168(k)) 7,000 LTCG on sale of stock 2,500 LTCL on sale of stock 5,000. LTCL carryover from prior years 1,000 Estimated fed. income taxes paid 800 Determine X's taxable income for the current year and its current earnings and profits.
Chapter19: Corporations: Distributions Not In Complete Liquidation
Section: Chapter Questions
Problem 33P
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Transcribed Image Text:X Corporation is a cash method, calendar year taxpayer. During the current year, X has the following income and
expenses:
Gross Profits from sales 20,000
Salaries paid to employees 10,250
Tax-exempt interest received 3,000
Dividends received from IBM 5,000
Depreciation (X purchased 5-year
property in the current year for 7,000;
assume the property was fully expensed
under rule 168(k)) 7,000
LTCG on sale of stock 2,500
LTCL on sale of stock 5,000.
LTCL carryover from prior years 1,000
Estimated fed. income taxes paid 800
Determine X's taxable income for the current year and its current earnings and profits.
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