In 2017,T Corporation changed its tax year from ending each April 30th to ending each December 31st.The corporation earned $60,000 during the period May 1,2017 through December 31,2017.The annualized income for the short year is $90,000.

Question

Quizplus · Accepted Answer

This is true because the annualized income is calculated by taking the actual income earned during the short tax year and multiplying by 12/8 (the number of months in a full year divided by the number of months in the short year). Therefore, the annualized income is $90,000 ($60,000 x 12/8).

In 2017,T Corporation Changed Its Tax Year from Ending Each