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XYZ is a calendar-year corporation that began business on January 1,2022 . For the year, it reported the following Information in its current-year audited Income
XYZ is a calendar-year corporation that began business on January 1,2022 . For the year, it reported the following Information in its current-year audited Income statement. Notes with Important tax Information are provided below. Use Cuhihit 16 of EXHIBIT 16-6 Net Operating Loss Carryback and Carryover Summary* 1. XYZ owns 30% of the outstanding Hobble Corporation (HC) stock. Hobble Corporation reported $1,000,000 of Income for the year. XYZ accounted for its Investment In HC under the equity method, and it recorded its pro rata share of HC 's earnings for the year. HC also distributed a $200,000 dividend to XYZ. For tax purposes, HC reports the actual dividend recelved as income, not the pro rata share of HC 's earnings. 2. Of the $20,800 Interest Income, $5,200 was from a Clty of Seattle bond, $7,200 was from a Tacoma City bond, $6,200 was from a fully taxable corporate bond, and the remaining $2,200 was from a money market account. 3. This gain is from equipment that XYZ purchased in February and sold in December (I.e., it does not qualify as $1231 gain). 4. This includes total officer compensation of $2,500,000 (no one officer recelved more than $1,000,000 compensation). 5. This amount is the portion of incentive stock option compensation that was expensed during the year (reciplents are officers). 6. XYZ actually wrote off $27,500 of its accounts recelvable as uncollectible. 7. Tax depreciation was $1,925,000. 8. In the current year, XYZ did not make any actual payments on warrantles it provided to customers. 9. XYZ made $500,000 of cash contributions to charitles during the year 10. On July 1 of this year, XYZ acquired the assets of another business. In the process, It acquired $303,000 of goodwill. At the end of the year, XYZ wrote off $30,500 of the goodwill as Impalred. 11. XYZ expensed all of Its organizational expenditures for book purposes. XYZ expensed the maximum amount of organizational expenditures allowed for tax purposes. 12. The other expenses do not contain any items with book-tax differences. 13. This is an estimated tax provision (federal tax expense) for the year. Assume that XYZ is not subject to state income taxes. Estimated tax Information: XYZ made four equal estlmated tax payments totalling $360,000 ( $90,000 per quarter). For purposes of estimated tax Ilabilitles, assume XYZ was in existence In 2021 and that in 2021 it reported a tax llability of $500,000. Durlng 2022 , XYZ determined its taxable income at the end of each of the four quarters as follows: FInally, assume that XYZ is not a large corporation for purposes of estimated tax calculations. Note: Do not round Intermedlate calculations. Round your answers to the nearest dollar amount. d. Complete XYZ 's Form 1120, page 1 Note: Input all the values as positlve numbers. Use 2022 tax rules regardless of year on tax form. Form 1120 Department of the Treasury Intemal Revenue Service A Check if. 1a Consolidated return (attach Form 851) b Lifeonlife consolidated return 2 Personal holding co. (attach Sch. PH) 3 Personal service corp. (see instructions) 4 Schedule M-3 attached U.S. Corporation Income Tax Return For calendar year 2021 or tax year beginning 2021, ending 20 Go to www.irs.govi'Form1120 for instructions and the latest information. OMB NNo. 15450123 2021 B Employer identification number C Date incorporated (mmiddiyy) D Total assets (see instructions) (4) Address change XYZ is a calendar-year corporation that began business on January 1,2022 . For the year, it reported the following Information in its current-year audited Income statement. Notes with Important tax Information are provided below. Use Cuhihit 16 of EXHIBIT 16-6 Net Operating Loss Carryback and Carryover Summary* 1. XYZ owns 30% of the outstanding Hobble Corporation (HC) stock. Hobble Corporation reported $1,000,000 of Income for the year. XYZ accounted for its Investment In HC under the equity method, and it recorded its pro rata share of HC 's earnings for the year. HC also distributed a $200,000 dividend to XYZ. For tax purposes, HC reports the actual dividend recelved as income, not the pro rata share of HC 's earnings. 2. Of the $20,800 Interest Income, $5,200 was from a Clty of Seattle bond, $7,200 was from a Tacoma City bond, $6,200 was from a fully taxable corporate bond, and the remaining $2,200 was from a money market account. 3. This gain is from equipment that XYZ purchased in February and sold in December (I.e., it does not qualify as $1231 gain). 4. This includes total officer compensation of $2,500,000 (no one officer recelved more than $1,000,000 compensation). 5. This amount is the portion of incentive stock option compensation that was expensed during the year (reciplents are officers). 6. XYZ actually wrote off $27,500 of its accounts recelvable as uncollectible. 7. Tax depreciation was $1,925,000. 8. In the current year, XYZ did not make any actual payments on warrantles it provided to customers. 9. XYZ made $500,000 of cash contributions to charitles during the year 10. On July 1 of this year, XYZ acquired the assets of another business. In the process, It acquired $303,000 of goodwill. At the end of the year, XYZ wrote off $30,500 of the goodwill as Impalred. 11. XYZ expensed all of Its organizational expenditures for book purposes. XYZ expensed the maximum amount of organizational expenditures allowed for tax purposes. 12. The other expenses do not contain any items with book-tax differences. 13. This is an estimated tax provision (federal tax expense) for the year. Assume that XYZ is not subject to state income taxes. Estimated tax Information: XYZ made four equal estlmated tax payments totalling $360,000 ( $90,000 per quarter). For purposes of estimated tax Ilabilitles, assume XYZ was in existence In 2021 and that in 2021 it reported a tax llability of $500,000. Durlng 2022 , XYZ determined its taxable income at the end of each of the four quarters as follows: FInally, assume that XYZ is not a large corporation for purposes of estimated tax calculations. Note: Do not round Intermedlate calculations. Round your answers to the nearest dollar amount. d. Complete XYZ 's Form 1120, page 1 Note: Input all the values as positlve numbers. Use 2022 tax rules regardless of year on tax form. Form 1120 Department of the Treasury Intemal Revenue Service A Check if. 1a Consolidated return (attach Form 851) b Lifeonlife consolidated return 2 Personal holding co. (attach Sch. PH) 3 Personal service corp. (see instructions) 4 Schedule M-3 attached U.S. Corporation Income Tax Return For calendar year 2021 or tax year beginning 2021, ending 20 Go to www.irs.govi'Form1120 for instructions and the latest information. OMB NNo. 15450123 2021 B Employer identification number C Date incorporated (mmiddiyy) D Total assets (see instructions) (4) Address change
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