100%(2)2 out of 2 people found this document helpful
This preview shows page 6 - 9 out of 10 pages.
Following contributions of inventory qualify for increased contribution amount Property Contribution ○2-2g (Charitable Contributions)•Taxation Page 6
infant, or Must be contributed within 2 year from date of construction by donor and original use must begin with doneeContribution of tangible personal research property constructed by corporation to a qualified educational or scientific organization that use property for research or experimentation or for research training □Computed without regard to charitable contribution deduction NOL carryback/ forward Dividend receive deduction Domestic production activities deduction Added to subsequent contribution and will be subject to 10% limit ◊Contribution over 10% can carryforward for 5 years Current year deducted first, with carryover amounts from previous years deducted in order of timeLimited to 10% of taxable income □Corporation subjected to % limit on charitable contribution deduction Limitations Imposed on Charitable Contribution Deductions ○Qualified production activities income orTaxable income 9 percent of the lower of○DPAD can't exceed 50% of employer's W-2 wage related to qualified production activities For individual, AGI is substituted for taxable income ○2-2h (Domestic Production Activities Deduction)•Corporation can elect to just carryforwardNOL carried back 2 and forward 20 to offset taxable income for those years ○Corporation not permitted a deduction for net capital losses No adjustments for any nonbusiness deduction Allowed to include dividends received deduction in computing NOLCorporation does not adjust its tax loss for the year for capital losses○2-2i (Net Operating Losses)•Mitigate multiple taxation of corporate incomeRecipient corporate shareholder holds in domestic corporation making the dividend distribution □The amount of dividend received deduction depends upon the % of ownership Can't exceed taxable incomeTaxable income limitation does not apply if corporation has NOL for current taxable year□Taxable income is computed without regard to NOL deduction, domestic production activities deduction, dividends received deduction, and any capital loss carrybackMultiply dividends received by deduction %□Multiple taxable income by deduction %□Unless deducting amount in step 1 result in NOL. If so amount derived in Deduction limited to lessor of 1 or 2□Steps useful in applying these rulesDividends Received Deduction ○2-2j (Deductions Available Only to Corporations) •Taxation Page 7
Unless deducting amount in step 1 result in NOL. If so amount derived in step 1 is used No dividend received deduction is allowed unless corporation has held stock for more than 45 daysLimited to interest deduction allocable to dividend Dividend received deduction is reduced with respect to dividend-paying stock by