ACCOUNTING TAX

1. Donor Corporation had the following income and deductions for last year:

Sales	$5,000
Cost of sales	3,500,000
Other operating expenses	800,000
Dividends(from 5% owned domestic corporations)	100,000

Donor Corporation also made contributions (not included above) to qualifying charitable organizations of $175,000. Determine Donor Coporation's taxable income for the year.

2. Barbara sells an asset to her wholly-owned corporation. The asset has a basis of $32,000 and a fair market value at the time of the sale of $27,000. What is the corporation's recognized gain or loss if it sells the asset for $30,000 several years later?