1. What is the dividend received deduction?

(This is a deduction. So write the number and the sign. For example, if the answer is -1000, write -1000 or -1,000)

2. How much interest income does Brown need to include in its taxable income?
3. How much net capital loss deduction can Brown take?
4. How much charitable contribution deduction can Brown take?

Hint: The charitable contribution deduction is limited to 10% of taxable income before the CCD, DRD, NOL and CL carryback, and the DPAD. Taxable income before the CCD and DRD (we have no NOL or CL carryback or DPAD in this problem) is $885,000.

5. What is Brown's taxable income this year?

Income $4,440,000 (1,840,000) 2,600,000 Sales Cost of goods sold Gross Profit Dividends received from stock investments in Less than 20% owned U.S. corporations Interest income State bonds 35,000 $12,000 16.000 Corporate bonds Total Income 28.000 $2,663,000 Expenses Salaries 1,000,000 Taxes (state, local, and payroll) 190,000 Repairs and maintenance 112,000 25,000 Net Capital Loss Interest expense: Loan to purchase state bonds 7,000 Other business loans 174,000 181,000 132,000 Advertising Depreciation for book purpose* 80,000 Charitable contributions 100,000 48,000 Employee benefit programs (a regular corporate expense) Premiums on term life insurance policies on lives of Janet and Kim 32,000 Total expenses Net income before taxes Federal Income tax Net income per books (1,900,000) 763,000 (282,370) 480,630