Topeka and Wichita Corporations have filed consolidated tax returns for several years Topeka and Wichita report current year taxable incomes (without regard to any dividend income received, charitable contribution deduction, or dividends received deduction) of $200,000 and $150,000, respectively Th...

a Consolidated taxable income is 290800 calculated as follows Consolidated adjusted taxab ...

Topeka and Wichita Corporations have filed consolidated tax returns for several years. Topeka and Wichita report current

Question:

Topeka and Wichita Corporations have filed consolidated tax returns for several years. Topeka and Wichita report current year taxable incomes (without regard to any income received, charitable contribution deduction, or dividends-received deduction) of $200,000 and $150,000, respectively. The $200,000 includes $30,000 profit on inventory that Topeka sold to Wichita on December 29 of the current year. Wichita sold none of the inventory before the end of the year. Topeka and Wichita received dividends of $10,000 and $4,000, respectively, during the current year that qualify for the 70% dividends-received deduction. Wichita’s and Topeka’s cash contributions to public charities during the current year are $45,000 and $5,000, respectively. Ignore the U.S. production activities deduction.
a. What is the Topeka-Wichita group’s consolidated taxable income?
b. What is the amount of the charitable contribution carryover? How long can it be carried back and/or forward?
c. What is the Topeka-Wichita group’s regular tax liability? Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...