Net capital loss carryover from 2017 expire b 10

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net capital loss carryover from 2017 expire? b. ( 10 points: 5 for the answer to each question ) Assume that all of the capital loss carryover to 2018 is applied against the $13,000 of net capital gain. This generates a book-tax difference for 2018. Is this book-tax difference favorable or unfavorable? Is it temporary or permanent? 3
4. ( 12 points: 4 points each ) Identify the additional amount of tax that will be due from the taxpayer on the dividends received in each of the scenarios below. a. Masha (an individual taxpayer) owns 100 percent of Metro Fashion Corporation. In 2017, she receives a $100,000 dividend from the Corporation. Masha’s other sources of income this year are wages of $80,000 (thus, she is not considered a high income taxpayer). b. Tyson Corporation owns 100 percent of Lafayette Corporation, and both companies are in the same affiliated group. Lafayette pays Tyson $300,000 in dividends in 2017. Aside from the dividend income, Tyson Corporation earned $400,000 in income from its ordinary operations during the year. c. Maya Enterprises (a corporate taxpayer) owns 15 percent of Tiger Corporation. Maya Enterprises earned $2 million from its ordinary operations during 2017. Tiger Corporation paid out a total of $1 million in dividends to all its owners, giving each owner a dividend in proportion to its ownership percentage. 1 Hint: We had to determine additional taxes due in the beginning of the class where we determined whether Bron should take the additional fight. This may help you remember how to estimate the additional amount of tax due as opposed to the total tax due in a situation. 1 4

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