Required problem (2) – Sequencing of special deductions • For year 2021, ABC Corporation reported the following: – Sales
Posted: Sat Feb 19, 2022 2:32 pm
Required problem (2) – Sequencing of special deductions • For
year 2021, ABC Corporation reported the following: – Sales revenue
100,000 – Cost of goods sold (80,000) – Dividend income from DEF
Corporation 5,000 – Charitable contributions (10,000) – Excess
capital losses over capital gains (10,000) • In addition, ABC has
$2,000 net operating loss from 2016. ABC owns 5% of DEF Corporation
stock. • (a) Compute ABC’s taxable income for 2021. • (b) List all
book-tax difference items, and for each item explain whether it is
favorable/unfavorable, permanent/temporary. • (c) Assume that book
tax expense is $525. Fill out ABC Corporation’s Schedule M-1. – You
can download Form 1120 from IRS website, fill out Schedule M-1, and
save a screenshot to the homework submission file. Note: no need to
submit other parts of Form 1120.
year 2021, ABC Corporation reported the following: – Sales revenue
100,000 – Cost of goods sold (80,000) – Dividend income from DEF
Corporation 5,000 – Charitable contributions (10,000) – Excess
capital losses over capital gains (10,000) • In addition, ABC has
$2,000 net operating loss from 2016. ABC owns 5% of DEF Corporation
stock. • (a) Compute ABC’s taxable income for 2021. • (b) List all
book-tax difference items, and for each item explain whether it is
favorable/unfavorable, permanent/temporary. • (c) Assume that book
tax expense is $525. Fill out ABC Corporation’s Schedule M-1. – You
can download Form 1120 from IRS website, fill out Schedule M-1, and
save a screenshot to the homework submission file. Note: no need to
submit other parts of Form 1120.