Habiby, Inc., began operations in 2019 and has the following income and expenses for 2019 through 2022.

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2019 2020 2021 2022 $ 180,000 $ 300,000 $ 320,000 (150,000) (400,000) $(100,000) $ 150,000 $ (80,000) $ 100,000 $ 320,000 (220,000) Income Expenses (280,000) Taxable Income

a. What is the amount of tax that Habiby should pay each year?

b. How much would Hadley paid in tax if the old NOL rules were in place but the corporate tax rate was 21 percent?

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Concepts In Federal Taxation 2021

ISBN: 9780357141212

28th Edition

Authors: Kevin E. Murphy, Mark Higgins, Randy Skalberg

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Question Posted: Nov 18, 2020 12:14 AM

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Habiby, Inc., began operations in 2019 and has the following income and expenses for 2019 through 2022.

Question:

2019 2020 2021 2022 $ 180,000 $ 300,000 $ 320,000 (150,000) (400,000) $(100,000) $ 150,000 $ (80,000) $ 100,000 $ 320,000 (220,000) Income Expenses (280,000) Taxable Income

Step by Step Answer:

a 2019 Habiby would pay no tax in 2019 due to its NOL for that year The NOL can be carried forward indefinitely 2020 Habiby would pay tax of 10500 21 ...View the full answer

Concepts In Federal Taxation 2021

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