| Corporation Special Situations and Organization Structure | ||
| Tarass Inc. is an accrual method calendar year corporation. Tarass, Inc. did not qualify for the domestic production | ||
| activities deduction. The following information has been provided about the activities occurring in 2013: | ||
| Reported on the financial statement – income after taxes | $25,85,000 | |
| Life insurance proceeds from CFO’s death | $1,00,000 | |
| Revenue from sales | $35,00,000 | |
| Key person life insurance policies premium | $15,000 | |
| Cost of goods sold (reported on book) | $2,75,000 | |
| MACRS depreciation | $65,000 | |
| Book depreciation | $4,40,000 | |
| AMT depreciation | $60,000 | |
| Interest income on private activity tax exempt bonds | $25,000 | |
| Interest paid on loan to purchase tax exempt bonds | $25,000 | |
| Net capital loss | $35,000 | |
| Rental income received and earned in 2013 | $5,000 | |
| Rental income received in 2012 but earned in 2013 | $10,000 | |
| Rental income received in 2013 but not earned | $5,000 | |
| Overhead costs expensed for financial reporting but are included in ending inventory for tax purposes under 263A | $45,000 | |
| Overhead costs expensed for financial reporting in 2012 but included in 2012 ending inventory. All 2012 ending inventory was sold in 2013. | $0 | |
| Charitable contributions | $3,15,000 | |
| Federal income tax expense reported on financial statements | $3,50,000 | |
| Using the information provided, complete the following tasks: | ||
| 1. Using Excel, prepare a reconciliation of book income and tax income. Set up the Excel spreadsheet using the example below: | ||
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| 2. Calculate Tarass Inc.’s tax liability for 2013. The calculation must be shown to receive full credit. | ||
| 3. Calculate Tarass Inc.’s alternate minimum tax for 2013, if any applies. The calculation must be shown to receive full credit. | ||
Attachments:
Corporation S….xlsx