2012 Corporate Tax Rate Schedule (partial)
Taxable Income Greater Than	But Less Than Or Equal To	Tax Is	Of the amount exceeding
$0	$50,000	15%	$0
$50,000	$75,000	$7,500 + 25%	$50,000
$75,000	$100,000	$13,750 + 34%	$75,000
$100,000	$335,000	$22,250 + 39%	$100,000

JKEB Corporation has the following revenues and expenses for the current tax year:

Sales revenue, net of returns . . . . . . . . . . . . . . . . . . . . . . . . . . . $100,000

Dividend Income (less than 20% owned investees) . . . . . . . . . . 25,000

Cost of sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30,000

Normal business expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40,000

1. What is JKEB Corporations dividends-received deduction for the current tax year?

2. Assuming that JKEB Corporations normal business expenses were $82,000 instead of $40,000, compute its dividends-received deduction for the current tax year.

JKEB Corporation incurred the following capital gains and losses in tax year 2012:

Short Term Capital Gain . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 20,000

Short Term Capital Loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (10,000)

Long Term Capital Gain . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,000

Long Term Capital Loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (28,000)

JKEBs prior corporate tax returns reflect the following net capital gain/ (loss):

2008 - $6,000 gain

2009$8,000 gain

2010($3,000) loss

2011$1,000 gain

3. Calculate the net capital gain (loss) for 2012. How is this reported on the 2012 Form 1120?

4. Calculate the amount of capital loss carryback (if any) to tax years 2008 through 2011 inclusive.

5. Calculate the amount of capital loss carryforward (if any) to 2013. How will this loss be treated in 2013 (i.e., as a short-term or long-term capital loss)?

JKEB Corporation had the following items during its 2012 tax year:

Net income from operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $150,000

Dividends received (from less than 20% owned investees). . . . . . . . . . . 10,000

Charitable contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30,000

Net operating loss carryover from 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . 30,000

Long-term capital gains. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,000

Long-term capital losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,000

Short-term capital gains . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,000

Capital loss carryover from 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,000

Tax Credit 4,500

6. Compute JKEB Corporations 2012 taxable income and income tax liability before tax credits.

7. What are the nature and amount of any carryovers to 2013?

8. What is the taxable amount due after using the tax credit?