Fundamentals of Taxation 2011 4th Edition by Ana Cruz, Debra Prendergast, Dan Schisler, Michael Deschamps

Exercise 55

Determine taxable income in each of the following instances. Assume that the corporation is a C corporation and that book income is before any income tax expense.
a. Book income of $50,000 including capital gains of $2,000, a charitable contribution of $1,000, and travel and entertainment expenses of $3,000.
b. Book income of $92,000 including capital losses of $3,000, a charitable contribution of $12,000, and travel and entertainment expenses of $3,000.
c. Book income of $76,000 including municipal bond interest of $2,000, a charitable contribution of $5,000, and dividends of $3,000 from a 10% owned domestic corporation. The corporation also has an $8,000 charitable contribution carryover.
d. Book income of $129,000 including municipal bond interest of $2,000, a charitable contribution of $5,000, and dividends of $7,000 from a 70% owned domestic corporation. The corporation has a capital loss carryover of $6,000 and a capital gain of $2,500 in the current year.