Calculate current eampp and accumulated eampp for each

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Reference no: EM13581851

XYZ Inc. had the following US GAAP income items:

In 2014, XYZ Inc. paid off the mortgage.

	2012	2013	2014	Notes:
Book P&L
Description	Dr (Cr)	Dr (Cr)	Dr (Cr)
Revenue	$(300,000)	$(400,000)	$(500,000)	no book to tax differences
Dividend income from Lowell Inc.	$(50,000)	$(50,000)	$(50,000)	qualifies for DRD
Gross Income	$(350,000)	$(450,000)	$(550,000)
Expenses:
Business expenses	$200,000	$200,000	$200,000	no book to tax differences
Depreciation	$10,000	$10,000	$10,000	Calculate tax depreciation from Chapter 9, Date placed in service = 1/1/2012. Assume no tax to E&P differences.
Charitable contributions	$20,000	$25,000	$30,000
Wages Shareholder A	$50,000	$60,000	$70,000	no book to tax differences (associated taxes booked in business expenses)
Wages Shareholder B	$50,000	$60,000	$70,000	no book to tax differences (associated taxes booked in business expenses)
Income before tax	$(20,000)	$(95,000)	$(170,000)
Federal income tax expense (estimate booked)	$30,000	$35,000	$40,000
Net (Income)Loss	$10,000	$(60,000)	$(130,000)

Distributions to:
Shareholder A	$-	$5,000	$10,000
Shareholder B	$-	$5,000	$10,000

A. Calculate taxable income for each year. (Be aware of items that carryover)

B. Calculate current E&P and accumulated E&P for each year.

C. Calculate the amount of dividend income, return of capital, or capital gain for the shareholder distributions.

Reference no: EM13581851

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