Jackson Corporation prepared the following book income statement for its year ended December 31, 2022:

• 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, 2022 for $334,000
• For books: 10-year life; straight-line depreciation (½ year taken in first year)
• Book depreciation in 2022: $334,000/10 * 0.5 = $16,700
• For tax: Seven-year MACRS property for which the corporation claimed 100% bonus depreciation for the entire cost.
Other information:
• Under the direct write off 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, both incurred last year.
• Jackson purchased the Invest Corporation stock (less than 20% owned) on June 21, 2020, for $25,000 and sold the stock on December 21, 2022, for $55,000.

Required:
a. For 2022, 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 2022, 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 profit Plus: Dividends received on Invest Corporation stock Gain on sale of Invest Corporation stock Total dividends and gain $ 3,000 30,000 $950,000 (450,000) $500,000 33,000