Jackson Corporation prepared the following book income statement for its year ended December 31, 2013: For

Jackson Corporation prepared the following book income statement for its year ended December 31, 2013:

• For tax: Seven-year MACRS property for which the corporation made no Sec. 179 election in the acquisition year and elected out of bonus depreciation.
Equipment 2:
• Acquired February 16, 2012 for $624,000
• For books: 12-year life; straight-line depreciation
• Book depreciation in 2013: $624,000/12 = $52,000
• For tax: Seven-year MACRS property for which the corporation made the Sec. 179 election in 2012 but elected out of bonus depreciation.
Other information:
• Under the direct writeoff method, Jackson deducts $15,000 of bad debts for tax purposes.
• Jackson has a $40,000 NOL carryover and a $6,000 capital loss carryover from last year.
• Jackson purchased the Invest Corporation stock (less than 20% owned) on June 21,
2011, for $25,000 and sold the stock on December 23, 2013, for $55,000.
• Jackson Corporation has qualified production activities income of $120,000.
Required:
a. For 2013, calculate Jackson's tax depreciation deduction for Equipment 1 and Equipment 2, and determine the tax loss on the sale of Equipment 1.
b. For 2013, calculate Jackson's taxable income and tax liability.
c. Prepare a schedule reconciling net income per books to taxable income before special deductions (Form 1120, line 28).

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Sales Minus: Cost of goods sold Gross proft PlusDividends received on Invest Corporation stock S 3,000 $950,000 450,000 $500,000 Gain on sale of Invest Corporation stock 30,000 Total dividends and gain 33,000 $59,500 22,000 105,500 70,000 Minus: Depreciation ($7,500 $52,000) Bad debt expense Other operating expenses Loss on sale of Equipment 1 Tota l expenses and loss Net income per books before taxes Minus: Net income per books (257,000) $276,000 (90,000) $186,000 Federal income tax expense Information on equipment depreciation and sale: .Acquired March 3, 2011 for $180,000 . Sold February 17, 2013 for $80,000 For books: 12-year life, straight-line depreciation Sales price Cost $ 80,000 $180,000 $ 7,500 15,000 7,500 Minus: Depreciation for 2011 ( year) Depreciation for 2012 ($180,000/12) Depreciation for 2013 (year) Total book depreciation (30,000) Book value at time of sale (150,000) Book loss on sale of Equipment 1