Individual Income Taxes
43rd Edition
ISBN: 9780357109731
Author: Hoffman
Publisher: CENGAGE LEARNING - CONSIGNMENT
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Chapter 16, Problem 49P
Gray, Inc., a C corporation, has taxable income from operations of $1,452,000 for 2019. It also has a net long-term capital loss of $355,000 from the sale of a subsidiary’s stock. The year 2019 is the first year in the last 10 years that Gray has not had at least $500,000 per year of net long-term
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Gray, Inc., a C corporation, has taxable income from operations of $1,452,000 for 2022. It also has a net long-term capital loss of $355,000 from the sale of a subsidiary's stock. The year 2022 is the first year in the last 10 years that Gray has not had at least $500,000 per year of net long-term capital gains.
What is Gray's 2022 taxable income? What, if anything, can it do with any unused capital losses?
If an amount is zero, enter "0".
Because Gray may deduct $fill in the blank 1 of the capital losses this year, its taxable income is $fill in the blank 2.
Any unused loss may be carried back for
choose answer: (three - five -seven)
years, then carried forward for
choose answer: (five- three -seven)
years as a
choose answer: (short-term capital loss- long-term capital loss)
against Gray's
capital gainsordinary taxable income
.
Gray, Inc., a C corporation, has taxable income from operations of $1,004,000 for 2022. It also has a net long-term capital loss of
$251,000 from the sale of a subsidiary's stock. The year 2022 is the first year in the last 10 years that Gray has not had at least
$401,600 per year of net long-term capital gains.
What is Gray's 2022 taxable income? What, if anything, can it do with any unused capital losses?
If an amount is zero, enter "0".
Because Gray may deduct $
0 ✓ of the capital losses this year, its taxable income is $
Any unused loss may be carried back for three ✔years, then carried forward for five
short-term capital loss ✔against Gray's capital gains ✓.
years as a
X.
Shamrock Inc. (Sham) reported a taxable loss AND an accounting loss of $130,000 in 2022. Sham has
before - tax accounting income for the prior two years as follows: 2021: $80,000 2020: $60,000
Assuming that Sham uses the carryback provisions and that the income tax rate is 25% for all years,
what amount of net loss for accounting purposes will be reported in 2022?
Chapter 16 Solutions
Individual Income Taxes
Ch. 16 - Prob. 1DQCh. 16 - An individual taxpayer sells some used assets at a...Ch. 16 - Alison owns a painting that she received as a gift...Ch. 16 - Prob. 4DQCh. 16 - Prob. 5DQCh. 16 - Prob. 6DQCh. 16 - Prob. 7DQCh. 16 - Prob. 8DQCh. 16 - After netting all of her short-term and long-term...Ch. 16 - Prob. 10DQ
Ch. 16 - Near the end of 2019, Byron realizes that he has a...Ch. 16 - Prob. 12CECh. 16 - Prob. 13CECh. 16 - Prob. 14CECh. 16 - On May 9, 2019, Glenna purchases 500 shares of...Ch. 16 - Prob. 16CECh. 16 - Prob. 17CECh. 16 - Elliott has the following capital gain and loss...Ch. 16 - Prob. 19PCh. 16 - Prob. 20PCh. 16 - Prob. 21PCh. 16 - George is the owner of numerous classic...Ch. 16 - Prob. 23PCh. 16 - Prob. 24PCh. 16 - Prob. 25PCh. 16 - Melaney has had a bad year with her investments....Ch. 16 - Prob. 27PCh. 16 - Prob. 28PCh. 16 - Prob. 29PCh. 16 - Prob. 30PCh. 16 - Prob. 31PCh. 16 - Prob. 32PCh. 16 - Prob. 33PCh. 16 - Prob. 34PCh. 16 - Prob. 35PCh. 16 - Prob. 36PCh. 16 - Prob. 37PCh. 16 - Dennis sells short 100 shares of ARC stock at 20...Ch. 16 - Elaine Case (single with no dependents) has the...Ch. 16 - Prob. 40PCh. 16 - Prob. 41PCh. 16 - Prob. 42PCh. 16 - Paul has the following long-term capital gains and...Ch. 16 - Helena has the following long-term capital gains...Ch. 16 - For 2019, Ashley has gross income of 38,350 and a...Ch. 16 - Prob. 46PCh. 16 - For 2019, Wilma has properly determined taxable...Ch. 16 - Prob. 48PCh. 16 - Gray, Inc., a C corporation, has taxable income...Ch. 16 - Harriet, who is single, is the owner of a sole...Ch. 16 - Ashley Panda lives at 1310 Meadow Lane, Wayne, OH...Ch. 16 - Paul Barrone is a graduate student at State...Ch. 16 - Prob. 1RPCh. 16 - Prob. 2RPCh. 16 - Prob. 3RPCh. 16 - Prob. 4RPCh. 16 - Prob. 1CPACh. 16 - Conner purchased 300 shares of Zinco stock for...Ch. 16 - Brad and Angie are married and file a joint...
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- Prior to and during 2019, Shadrach Company reported tax depreciation at an amount higher than the amount of financial depreciation, resulting in a book value of the depreciable assets of 24,500 for financial reporting purposes and of 20,000 for tax purposes at the end of 2019. In addition, Shadrach recognized a 3,500 estimated liability for legal expenses in the financial statements during 2019; it expects to pay this liability (and deduct it for tax purposes) in 2023. The current tax rate is 30%, no change in the tax rate has been enacted, and the company expects to be profitable in future years. What is the amount of the net deferred tax liability at the end of 2019? a. 300 b. 450 c. 1,050 d. 1,350arrow_forwardHow do the all events and economic performance requirements apply to the following transactions by an accrual basis taxpayer? a. The company guarantees its products for six months. At the end of 2019, customers had made valid claims for 600,000 that were not paid until 2020. Also, the company estimates that another 400,000 in claims from 2019 sales will be filed and paid in 2020. b. The accrual basis taxpayer reported 200,000 in corporate taxable income for 2019. The state income tax rate was 6%. The corporation paid 7,000 in estimated state income taxes in 2019 and paid 2,000 on 2018 state income taxes when it filed its 2018 state income tax return in March 2019. The company filed its 2019 state income tax return in March 2020 and paid the remaining 5,000 of its 2019 state income tax liability. c. An employee was involved in an accident while making a sales call. The company paid the injured victim 15,000 in 2019 and agreed to pay the victim 15,000 a year for the next nine years.arrow_forwardB Corporation, a calendar year-end, accrual basis taxpayer, is owned 75 percent by Bonnie, a cash basis taxpayer. On December 31,2019, the corporation accrues interest of $4,000 on a loan from Bonnie and also accrues a $15,000 bonus to Bonnie. The bonus is paid to Bonnie on February 1,2020; the interest is not paid until 2021 . How much can B Corporation deduct on its 2019 tax return for these two expenses? $0 $4,000 $15,000 $19,000 $12,000arrow_forward
- In 2020, Ace Corporation reports gross income of $200,000 (including $150,000 of profit from its operations and $50,000 in dividends from less-than-20%-owned domestic corporations) and $230,000 of operating expenses. A. What is Ace’s NOL for 2020 B. Assume that Ace expects 2021’s taxable income to be $20,000 and 2022’s taxable income to be $100,000, both before any NOL deduction in the carryover year. What NOL deductions can Ace expect to claim in 2021 and 2022 C. How would your answer to Part b change if, in addition to the 2020 NOL, Ace also had a $5,000 NOL carryover from a loss occurring before 2018?arrow_forwardWCC Corporation has a $125,000 net operating loss carryover into 2021. Assume that it reported $80,000 of taxable income in 2021 (before the net operating loss deduction) and $55,000 of taxable income in 2022 (before the net operating loss deduction). (Leave no answer blank. Enter zero if applicable.) b. What is WCC’s taxable income in 2021 and 2022 (after the net operating loss deduction), assuming the $125,000 NOL carryover originated in 2020 and WCC elected to not carry back the loss?arrow_forwardAssume the following facts for Munoz Company in 2019. Munoz reported pretax financial income of $800,000. In addition, Munoz reported the following differences between its pretax financial income and taxable income: • Interest income of $120,000 was received during 2019 from an investment in municipal bonds. This income is exempt for tax purposes. • Rent income of $40,000 was collected in 2018 and included for tax purposes during that year. For financial statement purposes, it will be reported as earned equally in 2019 and 2020. • An asset with a 5-year life was purchased during 2019; straight-line depreciation for book purposes was $40,000. MACRS depreciation expense for 2019 was $100,000. • Warranty expense of $20,000 was recognized on the 2019 income statement, while $6,000 was recognized for tax purposes. (Assume a 1-year warranty contract.) The balance of the Deferred Tax Asset account (debit) at January 1, 2019, was $16,000 as a result of the rent income temporary…arrow_forward
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