McOwen Inc.reported $6,029,400 net income before tax on this year's financial statements prepared in accordance with GAAP.The corporation's records reveal the following information.
• A tornado destroyed an office building and its contents.McOwen's book basis in the building and contents was $4,100,000 and its tax basis in the building and contents was $1,539,000.McOwen's reimbursement from its insurance company was $1 million.
• Four years ago,McOwen realized a $90,000 gain on the sale of investment property and elected the installment sale method to report the gain for tax purposes.Its gross profit percentage is 37.45%,and it received a $40,000 principal payment on its installment note this year.
• Net income per books includes a $13,670 net capital gain.McOwen has a $63,000 capital loss carryforward into the current year.
• Depreciation expense per books was $111,400,and MACRS depreciation was $398,100.
Compute McOwen's taxable income.

Question

Quizplus · Accepted Answer

The Answer of McOwen Inc.reported $6,029,400 net income before tax on this year's financial statements prepared in accordance with GAAP.The corporation's records reveal the following information.
• A tornado destroyed an office building and its contents.McOwen's book basis in the building and contents was $4,100,000 and its tax basis in the building and contents was $1,539,000.McOwen's reimbursement from its insurance company was $1 million.
• Four years ago,McOwen realized a $90,000 gain on the sale of investment property and elected the installment sale method to report the gain for tax purposes.Its gross profit percentage is 37.45%,and it received a $40,000 principal payment on its installment note this year.
• Net income per books includes a $13,670 net capital gain.McOwen has a $63,000 capital loss carryforward into the current year.
• Depreciation expense per books was $111,400,and MACRS depreciation was $398,100.
Compute McOwen's taxable income.