Gonzo Inc.is an S corporation that has chosen a fiscal year ending November 30.For the fiscal year ended November 30,2011 Gonzo Inc.had taxable income of $192,000 and the prior year made a required payment of $3,000.What is the amount of the required tax payment that should be made in 2012?

Question

Quizplus · Accepted Answer

The required tax payment for 2012 is based on the taxable income for 2011. Since Gonzo Inc. is an S corporation, the taxable income is passed through to the shareholders who report it on their individual tax returns. To calculate the required tax payment for 2012, we need to use the following formula:

Prior year's taxable income x applicable tax rate - prior year's tax payment = required tax payment for current year

Using the information provided, we can calculate the required tax payment for 2012 as follows:

$192,000 x 0.29 (the maximum corporate tax rate for 2011) - $3,000 = $52,080 - $3,000 = $49,080

However, since an S corporation doesn't pay federal income tax, this tax liability will pass through to the shareholders. The shareholders will then report their share of the corporation's taxable income on their individual tax returns and pay the appropriate amount of tax. Therefore, the answer is C) $2,760, which is the amount of the required tax payment for the corporation if the corporation were not an S corporation.

Gonzo IncIs an S Corporation That Has Chosen a Fiscal Year