Compute seps taxable income

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SEP, a calendar year corporation, reported $918,000 net income before tax on its financial statements prepared in accordance with GAAP. The corporation's records reveal the following information:

Point 1: SEP incurred $75,000 of research costs that resulted in a new l7-yeat patent for the corporation. SEP expensed these costs for book purposes.

Point 2: SEP's depreciation expense per books was $98,222, and its MACRS depreciation deduction was $ 120,000.

Point 3: SEP was organized two years ago. For its first taxable year, it capitallzed $27,480 start-up costs and elected to amortize them over 180 months. For book purposes, it expensed the costs in the year incurred.

Question 1: Compute SEP's taxable income.

Reference no: EM132484638

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