Pink Corporation is an accrual basis taxpayer that uses the recurring item exception to the economic performance test for all relevant years. For 2014, the corporation's income subject to state income tax was $500,000 and the state corporate tax rate was 6%. During 2014, the corporation paid $24,000 on its estimated state income tax liability for that year. The remaining $6,000 of 2014 state income tax was paid in April 2015. In June 2014, the corporation paid $9,000 on its year 2013 state income tax liability, as a result of an audit of the 2013 return that was conducted in 2014. The company has elected to use the recurring item exception to economic performance. As a result of the above, the corporation should deduct in 2014 on its Federal income tax return state income taxes of:

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The Answer of Pink Corporation is an accrual basis taxpayer that uses the recurring item exception to the economic performance test for all relevant years. For 2014, the corporation's income subject to state income tax was $500,000 and the state corporate tax rate was 6%. During 2014, the corporation paid $24,000 on its estimated state income tax liability for that year. The remaining $6,000 of 2014 state income tax was paid in April 2015. In June 2014, the corporation paid $9,000 on its year 2013 state income tax liability, as a result of an audit of the 2013 return that was conducted in 2014. The company has elected to use the recurring item exception to economic performance. As a result of the above, the corporation should deduct in 2014 on its Federal income tax return state income taxes of:

Pink Corporation Is an Accrual Basis Taxpayer That Uses the Recurring