Brown Corporation has the following items for the year 2013. Its income statement is as follows. Income Sales $4,440,000 Cost of goods sold (1,840,000) Gross Profit 2,600,000 Dividends received from stock investments in Less than 20% owned U.S. corporations 35,000 Interest income State bonds $12,000 Corporate bonds 16,000 28,000 Total Income $2,663,000 Expenses Salaries 1,000,000 Taxes (state, local, and payroll) 190,000 Repairs and maintenance 112,000 Net Capital Loss 25,000 Interest expense: Loan to purchase state bonds 7,000 Other business loans 174,000 181,000 Advertising 132,000 Depreciation for book purpose* 80,000 Charitable contributions 100,000 Employee benefit programs (a regular corporate expense) 48,000 Premiums on term life insurance policies on lives of Janet and Kim 32,000 Total expenses (1,900,000) Net income before taxes 763,000 Federal Income tax (282,370) Net income per books 480,630 *Depreciation for tax purposes is $110,000. (a) What is the dividend received deduction? (This is a deduction. So write the number and the sign. For example, if the answer is -1000, write -1000 or -1,000) (b) How much interest income does Brown need to include in its taxable income? (c) How much net capital loss deduction can Brown take? (d) How much charitable contribution deduction can Brown take? Hint: The charitable contribution deduction is limited to 10% of taxable income before the CCD, DRD, NOL and CL carryback, and the DPAD. Taxable income before the CCD and DRD (we have no NOL or CL carryback or DPAD in this problem) is $885,000. (e) What is Brown's taxable income this year?

Year 2013