Question
Ardvark Inc., a calendar year taxpayer, reported $5,210,300 net income before tax on its financial statements prepared in accordance with GAAP. The corporation's records reveal
Ardvark Inc., a calendar year taxpayer, reported $5,210,300 net income before tax on its financial statements prepared in accordance with GAAP. The corporation's records reveal the following information.
Depreciation expense per books was $713,700, and MACRS depreciation was $662,000.
Ardvark exchanged old realty (-0- tax basis; $44,200 book basis) for new realty (FMV $50,000).
Book gain was included in book income, although the exchange was nontaxable for tax purposes.
Ardvark received a $100,000 insurance reimbursement for the destruction of machinery with a $29,000 tax basis and a $70,000 book basis.
Texark spent $110,000 to replace the machinery before year-end.
Compute Ardvark's taxable income.
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