C_corp_example (1) - and entertainment expense Depreciation...

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Tax 4001 C Corp Example PART I: Gold Corporation, owned 100% by Richard Gold (basis in stock = 300,000), has the following items of income and expense for 2009. Compute their taxable income and income tax liability (assume they are not eligible for the DPAD): Gross Profit $350,000 Interest on Corporate Bond 6,000 Interest on Municipal Bond 5,000 Dividends Received (less than 20% owned) 15,000 LTCL 3,000 Salary Expense ($50,000 paid to Richard) 150,000 Admin Expenses (includes $1,000 meals 10,500
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Unformatted text preview: and entertainment expense) Depreciation Expense (book) 12,000 Depreciation Expense (MACRS) 20,000 Charitable Contributions 15,000 Dividends Paid 100,000 Part II: Based on the information above, Compute their net book income after taxes (assume book tax expense = tax liability). Part III: Use M-1 to reconcile Book Income to Taxable Income Part IV: What are the tax implications to Richard Gold personally regarding Gold Corporatio n’s activities? What is his basis in his stock at the end of 2009?...
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This note was uploaded on 08/25/2010 for the course TAX 4001 taught by Professor Hampton,m during the Fall '08 term at University of Central Florida.

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