In determining a corporation's taxable income for state income tax purposes, which of the following does not constitute a subtraction modification from Federal income?

Question

Quizplus · Accepted Answer

The amount by which the Federal depreciation deduction exceeds the corresponding state amount is added back to Federal income, not subtracted, when determining a corporation's taxable income for state income tax purposes. This is because it represents an expense that was deducted federally but is not recognized to the same extent at the state level.

In Determining a Corporation's Taxable Income for State Income Tax