346Lec12 - Dividend Received Deduction Limits per p 17-18 1 Dividend 2 TI before DRD $10,000 $6,000 TI before DRD Actual DRD Potential DRD Deduction 70

346Lec12 - Dividend Received Deduction Limits per p 17-18 1...

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Dividend Received Deduction Limits per p. 17-18 DRD % 1 Dividend $10,000 70% $7,000 8000 0.7 2 TI before DRD $6,000 70% $4,200 1000 0.8 1000 1 TI before DRD $6,000 Actual DRD $(7,000) TI $(1,000) DRD % 1 Dividend $10,000 70% $7,000 2 TI before DRD $8,000 70% $5,600 TI before DRD $8,000 Actual DRD $(5,600) TI $2,400 Subsidiary Parent Indidivual Total Tax Subsidiary TI 1,000 tax (200) 200 800 Taxabe Dividend to parent 800 tax (160) 160 640 640 (128) 128 512 total tax 488 48.8% Potential Deduction Potential Deduction
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Schedule M-1 (p.2-25, ex. 34) Book Inc $92,400 Fed IT $7,500 Exempt Inc. $(5,000) Int. Exp. (for exempt) $500 Life Insur. Proceeds $(50,000) Life Insur. Premiums $2,600 Excess Capital Losses $2,000 Tax. Inc. $50,000 Book Deprec. > MACRS + to book Book Deprec. < MACRS - from book Timing Differences that reverse Depreciation vs. MACRS Capital losses "Excess" charitable contributions Deduction m-1 adjustment Yr. 1 Yr. 2 Yr. 1 Yr. 2 Charitable for book 20,000 9000 11000 11000 -11000 TI for tax before char. 90000 TI for tax before char. Yr 2 120,000
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Taxable Income
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  • Spring '13
  • WILSON
  • Accounting, Taxation in the United States, tax credit, TI

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