Chapter 4 Question 1

Margin Corporation, an accrual basis taxpayer, reports the following results for the current year (2022): Requirements a. What is Margin's taxable income? b. What is Margin's current eamings and profits (E\&P)? Margin Corporation, an accrual basis taxpayer, reports the following results for the current year (2022): Requirements a. What is Margin's taxable income? b. What is Margin's current earnings and profits (E\&P)? Results Income: GrossprofitfrommanufacturingoperationsDividendsreceivedfrom25%-owneddomesticcorporationInterestincome:CorporatebondsMunicipalbondsProceedsfromlifeinsurancepolicyonkeyemployeeSection1231gainonsaleofland210,00022,0008,00016,000150,000 Expenses: Administrative expenses 100,000 Bad debts 4.000 Depreciation: Financial accounting 65,000 Print Done Results Expenses: Administrative expenses Bad debts Depreciation: Financial accounting Taxable income Alternative depreciation system (for E \& P) NOL carryover Charitable contributions: Current year (2022) Carryover from last year Capital loss on sale of stock Penalty on late payment of federal taxes Print Done