1. Assume that in year 1 Hill Corporation reported a net operating loss of $19,2
ID: 2445334 • Letter: 1
Question
1. Assume that in year 1 Hill Corporation reported a net operating loss of $19,200 that it carried forward to year 2. In year 1, Hill also reported a net capital loss of $4,250 that it carried forward to year 2. In year 2, ignoring any carryovers from other years, Hill reported a loss for tax purposes of $70,000. The current year loss includes a $19,500 net capital gain.
What is Hill’s year 2 net operating loss?
2. For the current year, CCP Inc. received the following interest income:
$36,000 interest from Irvine City bonds: Bonds issued in 2012 and proceeds used to fund public schools.
$13,300 interest from Mission Viejo City: Bonds issued in 2013 and proceeds used to lure new business to the area.
b. What amount of interest should CCP report as a preference item when calculating its alternative minimum tax liability?
1. Assume that in year 1 Hill Corporation reported a net operating loss of $19,200 that it carried forward to year 2. In year 1, Hill also reported a net capital loss of $4,250 that it carried forward to year 2. In year 2, ignoring any carryovers from other years, Hill reported a loss for tax purposes of $70,000. The current year loss includes a $19,500 net capital gain.
Explanation / Answer
Answer:-
year 2 operationg Loss
a.What amount of this interest income is taxable to CCP?
What amount of interest should CCP report as a preference item when calculating its alternative minimum tax liability?
Types Amount Net Operating Loss for Year2 (70,000) Capital Gain (19,500) Interest from Irvine City Bonds (36,000) Interest from Flour Corp Bonds (44,000) Interest from Mission Vejo Bonds (13,300) Interest from US Treasury (11,300) Total Operating Loss Year 2 (194,100)Related Questions
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