In computing the accumulated earnings tax, it is necessary to compute "adjusted taxable income." Which one of the following is not added to taxable income to arrive at adjusted taxable income?

Question

Quizplus · Accepted Answer

Net capital gains are not added back to taxable income to arrive at adjusted taxable income when computing the accumulated earnings tax. Adjusted taxable income is calculated to determine if a corporation has retained earnings beyond its reasonable business needs, and typically involves adding back certain deductions to taxable income, but net capital gains are not among these adjustments.

In Computing the Accumulated Earnings Tax, It Is Necessary to Compute