Rose Corporation (a calendar year taxpayer) has taxable income of $300,000, and its financial records reflect the following for the year. $\begin{array}{llr}
\text { Federal income taxes pad} &\$110,000\
\text { Net operating loss carry forward deducted currently} &70,000\
\text { Gain recognized this year on an installment sale from a prior year } &44,000\
\text {Depreciation deducted on tax return (ADS depreciation would have been $ \$ 10,000 $ ) } &40,000\
\text { Interest income on Iowa state bonds } &8,000\
\end{array}$
? Rose Corporation's current E & P is:

Question

Rose Corporation (a calendar year taxpayer) has taxable income of $300,000, and its financial records reflect the following for the year. $\begin{array}{llr}
  \text {  Federal income taxes pad} &\$110,000\
 \text {  Net operating loss carry forward deducted currently} &70,000\
 \text { Gain recognized this year on an installment sale from a prior year } &44,000\
 \text {Depreciation deducted on tax return (ADS depreciation would have been $ \$ 10,000 $ )  } &40,000\
 \text { Interest income on Iowa state bonds } &8,000\
\end{array}$
 ? Rose Corporation's current E & P is:

Quizplus · Accepted Answer

E & P = Taxable income + Permanent differences - Temporary differences= 300,000 + 8,000 - (70,000 + 40,000 - 10,000)= 300,000 + 8,000 - 60,000= 254,000

Rose Corporation (A Calendar Year Taxpayer) Has Taxable Income of $300,000