Question

Penguin Corporation (a cash basis, calendar year taxpayer) recorded the following income and expenses in the current year.
Income from services ............... $400,000
Salaries paid to employees ............. 70,000
Tax-exempt interest income .............. 24,000
Dividends from a corporation in which
Penguin holds a 12% interest ........... 40,000
Short-term capital loss on the sale of stock ........ 17,000
Estimated Federal income taxes paid ......... 110,000
Penguin purchased seven-year MACRS property in the current year for $80,000.
No § 179 election was made. The property has a 10-year ADR midpoint life. Determine Penguin’s taxable income and current E & P.


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  • CreatedMay 25, 2015
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