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In its first taxable year, M. Pascual Enterprises had a $100,000 net operating loss and gave...

In its first taxable year, M. Pascual Enterprises had a $100,000 net operating loss and gave to $10,000 cash donation to Say Yes to Common Sense (charitable organization). In its second year, M. Pascual Enterprises' operating income was $350,000 and gave $20,000 donation to the Say Yes to Common Sense (charitable organization). What is M. Pascual Enterprises' taxable income for its second year?

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Answer #1
Assuming charitable contribution is an eligible contribution under IRS
Taxable income= Net operating income of current year-Charitable contribution of current year-Standard deduction-Net operating loss-charotable contribution last year as was not able to get the benefit.
Now the charitable contribution is within limits hence can be taken.
350000-20000-12200-100000-10000 207800
Ans Taxable income is $207800
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