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Unformatted text preview: a prior tax year. Water claimed a $10,000 U.S. production activities deduction Taxable income includes a deduction for $40,000 of depreciation that exceeds the depreciation allowed for E&P purposes. Assume a 34% corporate tax rate. What is Waters current E&P for the year? $500,000-$80,000 capital loss +$56,000 (70% of $80,000 dividends) Dividends received deduction-$6,000 fines +$20,000 NOL deduction +$10,000 US Productions Activities deduction +$40,000 excess depreciation-$170,000 income taxes ($500,000 x 34% corporate tax rate) $370,000 is the E and P for the current year...
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- Spring '11