Perez Corporation is subject to tax only in State a Perez generated the following income and deductions. Federal taxable income is the starting point in computing A taxable income. State income taxes are not deductible for A tax purposes. Perez's A taxable income is:

Question

Perez Corporation is subject to tax only in State a Perez generated the following income and deductions.  Federal taxable income is the starting point in computing A taxable income. State income taxes are not deductible for A tax purposes. Perez's A taxable income is:

Quizplus · Accepted Answer

Since Perez Corporation is subject to tax only in State A, only State A taxable income needs to be calculated. Starting with federal taxable income, state income taxes are not deductible for A tax purposes, so Perez's taxable income for State A is $450,000 ($500,000 federal taxable income - $50,000 state income taxes not deductible for A tax purposes).

Perez Corporation Is Subject to Tax Only in State a Perez