1- In 2016, Apricot Corporation had taxable income of $120,000. Included in taxa
ID: 2560830 • Letter: 1
Question
1- In 2016, Apricot Corporation had taxable income of $120,000. Included in taxable income was a $10,000 capital gain. The $120,000 of taxable income does not include a $15,000 capital loss carryforward available from the previous year. What is Apricot Corporation's 2016 income tax liability before any tax credits?
a.$30,050
b.$28,550
c.$24,200
d.$26,150
e.None of these choices are correct
2- Ficus, Inc. began business on March 1, 2016, and elected to file its income tax return on a calendar-year basis. The corporation incurred $800 in organizational expenditures. Assuming the corporation does not elect to expense but chooses to amortize the costs over 180 months, the maximum allowable deduction for amortization of organizational expenditures in 2016 is:
a.$800.00
b.$44.44
c.$53.28
d.$4.44
e.None of these choices are correct.
Explanation / Answer
1)=22250+39%*(110000-100000)
=26150
The 10000 capital gain is deducted from the taxable income
2)Amortization per minth=cost/no of months
=800/180=4.44
But the amortization for 2016 is only for 10 months since it starts from march 1st
so =10*4.44=44.44
It is option B
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