Skinner Corporation, a calendar year C corporation, had the following transactions during the current year:
Skinner's taxable income (or NOL) for the current year is:

Question

Skinner Corporation, a calendar year C corporation, had the following transactions during the current year: ​
 Skinner's taxable income (or NOL) for the current year is:

Quizplus · Accepted Answer

Skinner Corporation had the following transactions during the current year:

1) Gross receipts $400,000 
2) Operating expenses $220,000 
3) Payment of salary to the president $100,000 
4) Dividend received from a domestic corporation $10,000 
5) Loss on sale of business use car $20,000

To calculate taxable income of Skinner Corporation, we need to deduct all allowable expenses from gross receipts:

Gross receipts $400,000
Less: Operating expenses ($220,000)
Less: Salary to president ($100,000)
Taxable income $80,000

Since there was a loss on sale of business use car of $20,000, we need to deduct this loss from taxable income:

Taxable income $80,000
Less: Loss on sale of business use car ($20,000)
Taxable income after netting the loss $60,000

Therefore, Skinner's taxable income for the current year is $60,000.

Skinner Corporation, a Calendar Year C Corporation, Had the Following