| There are two taxable income problems in the spreadsheet attached. Work through both problems listing out all income and deduction items. |
| NOTE - The Gross Income in the problem is referring to Revenue - Cost of Goods Sold = Gross Profit. Any other income items are in addition to the gross income amount. |
| | ABC Corporation reported the following items in 2016: | | | | 25 POINTS |
| | Gross Income | 800,000 |
| | Business Expenses | 775,000 |
| | Dividends | 300,000 | ---> | 250,000 | from XYZ Corp (ABC owns 65% of XYZ Stock) |
| | | | | 50,000 | from RST Corp (ABC owns 15% of RST Stock) |
| | Domestic Production Income | 40,000 | ---> | Allocable W-2 Wages = $50,000 |
| | Charitable Contributions | 75,000 |
| | Capital Loss Carryforward | 10,000 | ---> | From 2014 |
| | Net Operating Loss Carryforward | 60,000 | ---> | From 2011 |
| | Based on the information provided, compute ABC Corporation's Taxable Income for 2016. |
| | List all items included in calculation (Similar to presentation on Form 1120) |
| | What amounts, if any, will carryforward? |
| 2) | ZYX Corporation reported the following items in 2016: | | | | 25 POINTS |
| | Gross Income | 650,000 |
| | Business Expenses | 400,000 |
| | Dividends | 100,000 | ---> | 100,000 | from 80% owned subsidiary |
| | Net Capital Gain | 15,000 |
| | Domestic Production Income | 90,000 | ---> | Allocable W-2 Wages = $70,000 |
| | Charitable Contributions | 25,000 |
| | Capital Loss Carryforward | 5,000 | ---> | From 2015 |
| | Net Operating Loss Carryforward | 10,000 | ---> | From 2004 |
| | Based on the information provided, compute ZYX Corporation's Taxable Income for 2016. |
| | List all items included in calculation (Similar to presentation on Form 1120) |
| | What amounts, if any, will carryforward? |
COURTMCLARKE777
homework_2.xlsx
