Reference no: EM133925961

Question: Overview Earnings and profits (E&P) is similar to the accounting concept of retained earnings. Corporations are prohibited from retaining excess capital and will pay shareholders from earnings and profits. While retained earnings measures the accumulation of capital for financial reporting purposes, the calculation of E&P uses rules specified to tax law. IRC Section 312 outlines items that should be added or subtracted from a corporation's taxable income to arrive at E&P. Determining the correct amount of E&P also helps shareholders know if their distribution is a dividend, return of capital, or capital gain. Instructions Oolong Corporation is a calendar year, accrual basis corporation. For 2023, the corporate tax returns reports $475,740 in taxable income. Get expert-level assistance in any subject with our assignment help services.

In addition, the corporation provides the following information: Federal Income tax liability paid $ 95,148 Tax-exempt interest income 6,250 Entertainment Expense 4,750 Excess of capital losses over capital gains 14,000 MACRS cost recovery deduction 79,000 E&P depreciation (straightline depreciation using ADS) 56,000 Section 179 expense elected and deducted during 2020 for regular tax purposes 40,000 Dividends received from domestic corporations (less than 20% owned) 25,000 Using the readings from this module, and concept summary 5.1 in the book, calculate Oolong Corporations E&P for the calendar year.