Aloft Beyond, Corp., is a for-profit corporation duly organized in 2014 under the laws of Puerto Rico. Its shareholders, Jos and Mara, both own 50% of the entity's common shares. The entity uses the accumulation system (accrual basis). As of December 31, 2021, the audited financial statements of the corporation are presented below

Aloft beyond corp situation state December 31
Active	2020	2021
Cash	950,000	1,227,000
accounts receivable	600,000	700,000
tax paid in advance	0	125,000
inventory	5,120,000	5,500,5000
property and equipment	2,400,000	2,000,000
net investment in sofi industries, corp	500,000	500,000
investment in bonds	250,000	150,000
total assets	9,900,000	10,202,000
passives
Accounts payable	800,000	650,000
loans payable	1,000,000	900,000
income tax payable	0	100,000
total liabilities	1,800.000	1,650,000
capital
common actions	100,000	100,000
surplus capital	3,000,000	3,000,000
retained earnings	8,100,000	8,552,000
total capital	8,100,000	8,552,000
total liabilities and capital	9,900,000	10,202,000

Aloft beyond , corp statement of income and expenses for the year ended December 31, 2021
Description	amount	note
Sales	13,500,000
less: cost of good sold	4,500,000	1
Gross margins	9,000,000
other income
dividends	15,000	2
interest	12,000	3
capital guan	40,000	4a
capital loss	(60,000)	4b
gross income	9,007,000
bills
Wages	5,375,000	5
rent	1,200,000	6
depreciation	400,000	7
boat expense	140,000	8
advertising	117,500
social security	411,188
Unemployment	10,000
patent	67,500
movable property tax	48,812
repairs and maintenance	225,000
donations	250,000	9
professional services	130,000	5
foods	40,000
Electricity	25,000
water and sewage	15,000
total expenditures	8,455,0000
net income before taxes	552,000
income tax provision	100,000
Net income	452,000

Notes

1. Beginning inventory $5,120,000 + purchases $4,880,000 ending inventory $5,500,000 = $4,500,000.

2. The corporation owns 12% of the common stock of Sofi Industries, Inc., a corporation domestic of Puerto Rico.

3. The $12,000 correspond to the following types of interest: $4,000 of California State bonds, $500 in bank account deposits, and $7,500 in bonds of the Premium Corporation, an entity subject to the payment of income tax. (No special tax rates apply)

4. Capital assets:

a. The corporation sold on August 15, 2021 an investment in common stock of XYZ Corporation for $120,000. The

shares were purchased on March 18, 2016 for $80,000.

b. The corporation sold on November 23, 2021 an investment in New York State bonds for $40,000. The bonds were purchased on July 1, 2016 for $100,000.

5. The wages reported to the Department of the Treasury through withholding vouchers (W-2) amount to $5 million. The professional services reported in 480.6 SP amount to $130,000.

6. The monthly rent of the different facilities of the corporation totals $100,000. As of December 31, 2021, the corporation accumulated the income for the year on its books. However, the rent for the month of December was paid on March 31, 2022.

7. Current Depreciation: The depreciation expense claimed in books coincides with the depreciation expense for taxes, according to the Internal Revenue Code. Property Class: Equipment; Acquisition date: 01/01/2020; Cost $2,800,000; Depreciation previously claimed $800,000; Shelf life: 7 years.

8. The corporation owns a boat which is used occasionally to entertain its employees

and conduct meetings with vendors and company executives. 9. The donations were made to qualified non-profit entities.

Additional Information

10. The corporation paid $24,000 of estimated income tax (four payments of $6,000) applicable to taxable year 2021 within the corresponding quarters and dates.

11. The entity generated ($1,900,000) net operating loss on 12/31/2020.

QUESTION

A - Determine the net income (loss) before contributions for the corporation as of December 31, 2021, using the table to reconcile the items presented in the statement of income and expenses, from a financial accounting basis to tax accounting. B - Determine and compute the special deductions to be claimed before net taxable income or net operating loss

C - Determine the income tax to be paid or the applicable refund of the corporation. Assume the Alternative Minimum Tax is $0.