Question

Alfix, a calendar year corporation, reported $789,300 net income before tax on its financial statements prepared in accordance with GAAP. The corporation’s records reveal the following information:
• Depreciation expense per books was $15,890, and MACRS depreciation was $40,120.
• Two years ago, Alfix exchanged one tract of investment land (Whiteacre) for a different tract of investment land (Greenacre). Alfix’s tax basis in Whiteacre was $500,000, and Greenacre’s FMV was $835,000. This year, Alfix sold Greenacre for $820,000 cash.
• Alfix transferred business property worth $112,000 to Dundee Inc. in exchange for 400 shares of Dundee stock. After the exchange, Dundee had 800 shares of stock outstanding. Alfix had a $91,000 book basis and a $68,200 tax basis in the business property. Compute Alfix’s taxable income.


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  • CreatedNovember 03, 2015
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