Concept explainers
LO.2 Osprey Corporation, an accrual basis taxpayer, had taxable income for 2019 and paid $40,000 on its estimated state income tax for the year. During 2019, the company received a $4,000 refund upon filing its 2018 state income tax return. The company filed its 2019 state income tax return in August 2020 and paid the $7,000 state income tax due for 2019. In December 2019, the company received a notice from the state tax commission that an additional $6,000 of income tax was due for 2017 because of an error on the return. The company acknowledged the error in December 2019 and paid the additional $6,000 in tax in February 2020. What is Osprey’s 2019 Federal income tax deduction for state income taxes?
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Chapter 18 Solutions
Individual Income Taxes
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