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I can't figure out why this is wrong? Isn't the Business Interest Deduction 30% of the business' Adjusted Taxable Income? The book has a similar
I can't figure out why this is wrong? Isn't the Business Interest Deduction 30% of the business' Adjusted Taxable Income? The book has a similar example that says the current deduction is exactly that. So if the Adjusted Taxable Income $22 million then it should be x 30% which equals $6,600,000 maximum deduction in the current year, with the excess of the net interest expense ($10,000,000) carried forward into the following year ($3,400,000).
FruAgro Company has average annual gross receipts of $76 million annually. This year, FruAgro earned $3 million of business interest income, incurred $13 million of business interest expense and has adjusted taxable income of $22 million. Compute FruAgro's current deduction for business interest and the amount of any business interest carryforward. (Enter your answers in dollars not in millions of dollars.) Answer is complete but not entirely correct. Business interest deduction Business interest carryforward $ $ 6,600,000 3,400,000Step by Step Solution
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