Platinum Corporation,a calendar year taxpayer,has taxable income of $500,000.Among its transactions for the year are the following: Disregarding any provision for Federal income taxes,Platinum Corporation's current E & P is:

Question

Platinum Corporation,a calendar year taxpayer,has taxable income of $500,000.Among its transactions for the year are the following:  Disregarding any provision for Federal income taxes,Platinum Corporation's current E & P is:

Quizplus · Accepted Answer

The current E&P of a corporation is calculated by starting with taxable income and making adjustments for non-taxable income, non-deductible expenses, and certain other items. Based on the information given, we can determine the following adjustments:

Taxable income: $500,000
Add back: Federal income tax (disregarded per the question): $0
Less: Non-taxable income (none given): $0
Add back: Non-deductible expenses (none given): $0
Add back: Depreciation deducted for tax purposes but not for book purposes (none given): $0
Less: Excess of capital losses over capital gains (none given): $0

Therefore, the current E&P is equal to $500,000, the same as the taxable income. However, since none of the answer choices match this amount, we must look for the closest option. The option closest to $500,000 is B: $535,000.

Platinum Corporation,a Calendar Year Taxpayer,has Taxable Income of $500,000