Ramirez Corporation is subject to tax only in State A.Ramirez generated the following income and deductions. Federal taxable income $500,000 State A income tax expense 45,000 Depreciation allowed for Federal tax purposes 300,000 Depreciation allowed for state tax purposes 250,000 Federal taxable income is the starting point in computing A taxable income.State income taxes are not deductible for A tax purposes.Ramirez's A taxable income is:

Question

Ramirez Corporation is subject to tax only in State A.Ramirez generated the following income and deductions. Federal taxable income $500,000 State A income tax expense 45,000 Depreciation allowed for Federal tax purposes 300,000 Depreciation allowed for state tax purposes 250,000 ​ Federal taxable income is the starting point in computing A taxable income.State income taxes are not deductible for A tax purposes.Ramirez's A taxable income is:

Quizplus · Accepted Answer

To compute State A taxable income, start with the federal taxable income of $500,000. Add back the state income tax expense of $45,000 (since it's not deductible for state purposes) and the difference in depreciation ($50,000) because state depreciation is less than federal. Thus, $500,000 + $45,000 + $50,000 = $595,000.

Ramirez Corporation Is Subject to Tax Only in State A Generated