Tangerine Corporation,a calendar year taxpayer,has taxable income of $400,000.Among its transactions for the year are the following:

Disregarding any provision for Federal income taxes,the effect of these transactions on Tangerine Corporation's current E & P is:

Question

Tangerine Corporation,a calendar year taxpayer,has taxable income of $400,000.Among its transactions for the year are the following:

Disregarding any provision for Federal income taxes,the effect of these transactions on Tangerine Corporation's current E & P is:

Quizplus · Accepted Answer

To taxable income,the proceeds from insurance policy on life of corporate officer (in excess of cash surrender value)is added and the nondeductible fines and penalties are subtracted.The realized gain (not recognized)on the involuntary conversion has no effect on E & P.

Tangerine Corporation,a Calendar Year Taxpayer,has Taxable Income of $400,000