Schedule M-1 of Form 1120 is used to reconcile financial net income with taxable income reported on the corporation's income tax return as follows: net income per books + additions - subtractions = taxable income. Which of the following items is an addition on Schedule M-1? Question answer options: Tax depreciation in excess of book depreciation. Proceeds of life insurance paid on death of key employee. Excess of capital losses over capital gains. Tax-exempt interest Four individuals form Chickadee Corporation under $ 351. Two of these individuals, Jane and Walt, made the following contributions: Fair Market Value Adjusted Basis From Jane Cash S360,000 $360,000 40,000 Patent 0 From Walt Equipment (depreciation claimed of S100,000) 240,000 370,000 Both Jane and Walt receive stock in Chickadee Corporation equal to the value of their investments Jane must recognize income of $40,000; Walt has no income. Neither Jane nor Walt recognize income. Walt must recognize income of S130,000, Jane has no income. Walt must recognize income of S100,000: Jane has no income