Monroe Corporation reported the following results for the current year: $\begin{array}{ll}
\text {Gross income from operation }&\$150,000 \
\text { Operating expenses}&145,000 \
\text {Dividends from $ 30 \% $ owned domestic corporation }&100,000 \
\text {Long-term capital gain }&2,000 \
\text {Short-term capital loss }&(3,000) \
\text {Charitable contributions }& 15,000\
\end{array}$
Included in the above is $5,000 of qualified production activities income. In addition, Monroe Corporation has a $5,000 NOL carryforward available from last year. What is Monroe Corporation's taxable income for the current year?

Question

Monroe Corporation reported the following results for the current year: $\begin{array}{ll}
\text {Gross income from operation }&\$150,000 \
\text { Operating expenses}&145,000 \
\text {Dividends from $ 30 \% $ owned domestic corporation }&100,000 \
\text {Long-term capital gain }&2,000 \
\text {Short-term capital loss }&(3,000) \
\text {Charitable contributions }& 15,000\
\end{array}$
 Included in the above is $5,000 of qualified production activities income. In addition, Monroe Corporation has a $5,000 NOL carryforward available from last year. What is Monroe Corporation's taxable income for the current year?

Quizplus · Accepted Answer

Monroe Corporation's taxable income for the current year is $13,550. This is calculated by taking the gross income from operations of $150,000 and subtracting the operating expenses of $145,000, the charitable contributions of $15,000, and the short-term capital loss of $3,000. The dividends from the 30% owned domestic corporation are not included in taxable income, and the long-term capital gain is offset by the short-term capital loss. The qualified production activities income is also not included in taxable income.

Monroe Corporation Reported the Following Results for the Current Year