Beta Corporation reports the following results for the current year: Gross Income from Operations...

Question:

Beta Corporation reports the following results for the current year:

Gross Income from Operations $180,000
Dividends from less-than-20 % owned domestic corporations $100,000
Operating Expenses $150,000
Charitable Contributions $20,000

In addition, Beta has a $50,000 NOL Carryover from the preceding tax year, and its qualified production activities income is $30,000.

a) What is Beta's taxable income for the current year?

b) What carrybacks or carryovers are available to other tax years?

Taxable income:

The income owned by an individual or company on which the government levies tax is known as taxable income. Taxable income is not the total income earned by the assesses; it excludes the exempted part of income.

Answer and Explanation:

Particulars Amount ($)
Gross income 180,000
Operating expense (150,000)
Net operating income 30,000
Set-off from previous loss (30,000)
Other income 100,000
Total income 100,000
Deduction for contribution (20,000)
Net taxable income 80,000

Therefore, the taxable income is $80,000.

b. The amount that is a carryover to next year is $20,000.


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How to Calculate Corporate Taxable Financial Income

from Accounting 202: Intermediate Accounting II

Chapter 8 / Lesson 2
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