Monroe Corporation reported the following results for the current year: $\begin{array}{llcc}
\text { Gross income from operations } &\$150,000 \
\text { Operating expenses } &154,000\
\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}$

In addition to the above, 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}{llcc}
  \text { Gross income from operations } &\$150,000  \
 \text { Operating expenses } &154,000\
 \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}$

In addition to the above, 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 $28,250. This is calculated by taking the gross income from operations of $150,000 and subtracting the operating expenses of $154,000, the charitable contributions of $15,000, and the net capital gain of $1,000 ($2,000 long-term capital gain - $3,000 short-term capital loss). The dividends from the 30% owned domestic corporation are not included in taxable income, and the NOL carryforward from last year is not used in the current year.

Monroe Corporation Reported the Following Results for the Current Year