Which of these items is not an adjustment to taxable income or net loss to compute current E&P?
A)Dividends received deduction.
B)Tax-exempt income.
C)Net capital loss carryforward utilized in the current year from the prior-year tax return.
D)Refund of prior-year taxes for an accrual-method taxpayer.

Question

Quizplus · Accepted Answer

A refund of prior-year taxes for an accrual-method taxpayer is not an adjustment to taxable income or net loss to compute current E&P. It is simply a return of excess taxes paid in a prior year. The other options, such as the dividends received deduction, tax-exempt income, and net capital loss carryforward are all adjustments that affect the computation of current E&P.

Which of These Items Is Not an Adjustment to Taxable