Silver Corporation,a calendar year taxpayer,has taxable income of $550,000.Among its transactions for the year are the following:

Disregarding any provision for Federal income taxes,Silver Corporation's current E & P is:

Question

Silver Corporation,a calendar year taxpayer,has taxable income of $550,000.Among its transactions for the year are the following:
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Disregarding any provision for Federal income taxes,Silver Corporation's current E & P is:

Quizplus · Accepted Answer

The formula for calculating current E&P is:
Taxable Income + Nontaxable Income - Non-deductible Expenses - Dividends Paid
= $550,000 + $50,000 (nontaxable income is added back as per the problem statement) - $50,000 (non-deductible expense of penalties) - $962,500 (dividends paid)
= $588,500
Therefore, the current E&P for Silver Corporation is $588,500. The correct answer is B.

Silver Corporation,a Calendar Year Taxpayer,has Taxable Income of $550,000