Current E&P Computation. Water Corporation reports $500,000 of taxable income for the current year. The following additional

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Current E&P Computation. Water Corporation reports $500,000 of taxable income for the current year. The following additional information is available:

For the current year, Water reports an $80,000 long-term capital loss and no capital gains.

Taxable income includes $80,000 of dividends from a 10%-owned domestic corporation.

Water paid fines and penalties of $6,000 that were not deducted in computing taxable income.

In computing this years taxable income, Water deducted a $20,000 NOL carryover from a prior tax year.

Water claimed a $10,000 U.S. production activities deduction.

Taxable income includes a deduction for $40,000 of depreciation that exceeds the depreciation allowed for E&P purposes.

Assume a 34% corporate tax rate. What is Waters current E&P for this year?

Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...
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Federal Taxation 2016 Comprehensive

ISBN: 9780134104379

29th Edition

Authors: Thomas R. Pope, Timothy J. Rupert, Kenneth E. Anderson

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