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.
• 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.