CHAPTER2 tax problem-4302 - CHAPTER 2 SUPPLEMENTAL HANDOUT...

CHAPTER 2
SUPPLEMENTAL HANDOUT C CORPORATION TAXATION PROBLEMS
1. Arleen Corporation, a calendar year C Corporation, had the following Income and Expenses for the
year of 2016:
Income From Operations $500,000
Expenses From Operation 240,000
Dividends Received (Less Than 20% Ownership) 30,000
Domestic Production Activities Deduction 10,000
Charitable Contribution 35,000
(a) What is Arleen Corporation's Charitable Contribution Deduction for the year of 2016?
(b) What happens to the portion of the Charitable Contribution that is not deductible for the year
of 2016?
(c) Assume that Arleen Corporation is an accrual basis calendar year corporation and the Board
Of Directors of Arleen Corporation has authorized the Charitable Contribution payment by the
end of the year of 2016. Can Arleen Corporation deduct the Charitable Contribution
payment for the year of 2016 (ie. on its 2016 Tax Return) if paid as follows:
March 10, 2017?
April 10, 2017?
2. The outstanding stock in Red Corporation, Blue Corporation and Green Corporation, each of