Madison Corporation reported taxable income of $400,000 in 20X3 and accrued federal income taxes of $136,000. Included in the computation of taxable income was regular depreciation of $200,000 (E&P depreciation is $60,000) and a net capital loss carryover of $20,000 from 20X2 utilized in 20X3. The corporation's current earnings and profits for 20X3 would be:

Question

Quizplus · Accepted Answer

$400,000 - $136,000 + $140,000 + $20,000 = $424,000. The capital loss carryover reduced E&P in 20X2.

Madison Corporation Reported Taxable Income of $400,000 in 20X3 and Accrued