Continue with the facts of Problem 44 Using the format
Continue with the facts of Problem 44. Using the format of Figure, compute state taxable income for HippCo, assuming also that the taxpayer recognized $225,000 of net rent income during the year from a warehouse building in Montana. Federal tax able income still is $1 million.
In problem
• Federal cost recovery deductions totaled $200,000. Montana used this amount, but Oregon allowed only $120,000.
• Interest income of $25,000 from Oregon bonds was excluded from Federal taxable income. Oregon taxes all municipal bond income, while Montana taxes all such interest except that from its own bonds.
• Interest income from Treasury bonds that was recognized on the Federal return came to $11,000. Neither state taxes such income.
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