Jackson Corporation prepared the following book income statement for its year ended December 31, 2015:

Information on equipment depreciation and sale:
€¢ Acquired March 3, 2013 for $180,000
€¢ For books: 12-year life; straight-line depreciation
€¢ Sold February 17, 2015 for $80,000
€¢ 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 1:

Equipment 2:
€¢ Acquired February 16, 2014 for $624,000
€¢ For books: 12-year life; straight-line depreciation
€¢ Book depreciation in 2015: $624,000/12 = $52,000
€¢ For tax: Seven-year MACRS property for which the corporation made the Sec. 179 election in 2014 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, 2013, for $25,000 and sold the stock on December 23, 2015, for $55,000.
€¢ Jackson Corporation has qualified production activities income of $120,000.
Required:
a. For 2015, 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 2015, 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 S950,000 Minus: Cost of goods sold Gross profit Plus Dividends received on Invest Corporation stock 450,000 S500,000 S 3,000 Gain on sale of Invest Corporation stock 30,000 Total dividends and gain 33,000 Minus: S 59,500 Depreciation (S7,500 +$52,000) Bad debt expense Other operating expenses Loss on sale of Equipment 1 Total expenses and loss 22,000 105,500 70,000 257.000 S276,000 190.000) S 186,000 Net income per books before taxes Minus: Federal income tax expense Net inc ome per books Sales price S 80,000 Cost S180,000 Minus: Depreciation for 2013 (year) $7,500 Depreciation for 2014 (S180,00012 15,000 Depreciation for 2015 (%year) Total book depreciation Z.500 (30.000) Book value at time of sale (150,000) Book loss on sale of Equipment 1 5170.000)