The Viking Corporation has the following items of income for 2011: Operating income ........... $350,000 Dividend income
Question:
The Viking Corporation has the following items of income for 2011:
Operating income ........... $350,000
Dividend income (12%-owned corporations) .. 15,000
Long-term capital gains ........... 9,000
Short-term capital gains ........... 3,000
Capital loss carryover from 2010 ...... 8,000
Charitable cash contributions ....... 12,000
Net operating loss carryover from 2010 ... 35,000
a. Calculate the corporation’s 2011 taxable income and its tax liability.
b. Assume that Viking is, and always has been, an S corporation wholly owned by Fran, a single taxpayer with no other income or deductions. Will either Viking Corporation or Fran realize any tax savings, given the income and liability determined in part a? Explain.
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...
Step by Step Answer:
a The taxable income is 311500 Netting the current years capital gains with the 2010 carryover results in a net capital gain of 4000 9000 3000 8000 Th...View the full answer
Concepts In Federal Taxation
ISBN: 9780324379556
19th Edition
Authors: Kevin E. Murphy, Mark Higgins, Tonya K. Flesher
