Silver Corporation,a calendar year taxpayer,has taxable income of $550,000.Among its transactions for the year are the following: Collection of proceeds from insurance policy on life of corporate
officer (in excess of cash surrender value)$~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~$$82,500
Realized gain(not recognized) on an involuntary conversion$~~~~~~~~~~~~~~~$ 11,000
Nondeductible fines and penalties $~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~\quad$44,000 Disregarding any provision for Federal income taxes,Silver Corporation's current E & P is:

Question

Quizplus · Accepted Answer

To calculate current E&P, we start with taxable income and make adjustments.
Starting with taxable income of $550,000, we add back any non-deductible expenses:
- None given in the problem
Then we subtract any tax-exempt income:
- None given in the problem
Next, we make adjustments for items that were not included in taxable income:
- None given in the problem
Finally, we subtract dividends paid to arrive at current E&P:
$550,000 - $38,500 = $511,500
Therefore, the correct answer is B) $588,500.

Silver Corporation,a Calendar Year Taxpayer,has Taxable Income of $550,000 ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ $82,500 Realized Gain(not Recognized) on an Involuntary Conversion

Silver Corporation,a Calendar Year Taxpayer,has Taxable Income of $550,000 $~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~$ $82,500
Realized Gain(not Recognized) on an Involuntary Conversion