Perez Corporation is subject to tax only in State A.Perez generated the following income and deductions. Federal taxable income is the starting point in computing A taxable income.State income taxes are not deductible for A tax purposes.Perez's A taxable income is:

Question

Perez Corporation is subject to tax only in State A.Perez generated the following income and deductions.  Federal taxable income is the starting point in computing A taxable income.State income taxes are not deductible for A tax purposes.Perez's A taxable income is:

Quizplus · Accepted Answer

Since Perez is subject to tax only in State A, only State A tax law is applicable to him. State income taxes are not deductible for A tax purposes, so Perez cannot deduct any state taxes from his federal taxable income. Therefore, Perez's A taxable income is the same as his federal taxable income which is $450,000.

Perez Corporation Is Subject to Tax Only in State A Generated