Question

Acrobatica, Inc., is a C corporation that files its return using a fiscal year. For the...

Acrobatica, Inc., is a C corporation that files its return using a fiscal year. For the return for the fiscal year ending on April 30, 2018, what corporate tax rate(s) applies to Acrobatica’s income?

A: The progressive tax rates, including a potential 3% or 5% surtax, in effect prior to the passage of the TCJA. Acrobatica will transition to the flat rate of 21% with the first return it files for a fiscal year beginning on or after January 1, 2018.

B: A flat tax rate income of 21% on all its income because the return is for a tax year ending in 2018. No surtaxes will apply.

C: A blended tax rate that applies the progressive rates to all income attributable to calendar year 2017 and applies a flat rate of 21% to all income attributable to calendar year 2018. Surtaxes may apply only to the 2017 portion of the income.

D: A flat rate of 21% on all income; however, a surtax of 5% or 3% may apply if Acrobatica’s taxable income places it in the appropriate range.

Homework Answers

Answer #1

C: A blended tax rate that applies the progressive rates to all income attributable to calender year 2017 and applies a flat rate of 21% to all income attributable to calender year 2018. Surtaxes may apply only to the 2017 portion of income .

C corporation that have fiscal year end other than December will able to blend their tax rate for each months of fiscal year that fall outside of 2017. So a April year end C corporation will have eight months uner the old rates and surtaxes may apply if income places in the appropriate range, and four months under the new tax rate i.e. 21%.

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Cranberry Corporation has $3,240,000 of current year taxable income. If the current year is a calendar...
Cranberry Corporation has $3,240,000 of current year taxable income. If the current year is a calendar year ending on December 31, 2017, calculate Cranberry's regular income tax liability. If the current year is a calendar year ending on December 31, 2018, calculate Cranberry’s regular income tax liability. If the current year is a fiscal year ending on April 30, 2018, calculate Cranberry's regular income tax liability. (Do not round intermediate calculations.) please don't guess, provide correct answer.
In its first year of existence (year 1), SCC corporation (a C corporation) reported a loss...
In its first year of existence (year 1), SCC corporation (a C corporation) reported a loss for tax purposes of $30,000. How much tax will SCC pay in year 2 if it reports taxable income from operations of $20,000 before considering loss carryovers under the following assumptions? (New Corporate income tax rate has been mentioned as "21% on all taxable income" as per the recent change. Leave no answer blank. Enter zero if applicable.) a. Year 1 is 2017. b....
Exercise 18-12 For its fiscal year ending October 31, 2017, Haas Corporation reports the following partial...
Exercise 18-12 For its fiscal year ending October 31, 2017, Haas Corporation reports the following partial data shown below. Income before income taxes $510,000 Income tax expense (33% x $377,000) 124,410 Income from continuing operations 385,590 Loss on discontinued operations 133,000 Net income $252,590 The loss on discontinued operations was comprised of a $54,000 loss from operations and a $79,000 loss from disposal. The income tax rate is 33% on all items. (a) Prepare a correct statement of comprehensive income...
Up and its 80 percent–owned subsidiary (Down) reported the following figures for the year ending December...
Up and its 80 percent–owned subsidiary (Down) reported the following figures for the year ending December 31, 2018. Down paid dividends of $54,000 during this period. Up Down Sales $ (1,080,000 ) $ (540,000 ) Cost of goods sold 540,000 252,800 Operating expenses 313,200 108,000 Dividend income (43,200 ) 0 Net income $ (270,000 ) $ (179,200 ) In 2017, intra-entity gross profits of $54,000 on upstream transfers of $162,000 were deferred into 2018. In 2018, intra-entity gross profits of...
Up and its 80 percent–owned subsidiary (Down) reported the following figures for the year ending December...
Up and its 80 percent–owned subsidiary (Down) reported the following figures for the year ending December 31, 2018. Down paid dividends of $33,000 during this period. Up Down Sales $ (660,000 ) $ (330,000 ) Cost of goods sold 330,000 154,100 Operating expenses 191,400 66,000 Dividend income (26,400 ) 0 Net income $ (165,000 ) $ (109,900 ) In 2017, intra-entity gross profits of $33,000 on upstream transfers of $99,000 were deferred into 2018. In 2018, intra-entity gross profits of...
6. For its fiscal year ending October 31, 2022, Concord Corporation reports the following partial data...
6. For its fiscal year ending October 31, 2022, Concord Corporation reports the following partial data shown below. Income before income taxes $523,800 Income tax expense (20% × $407,400) 81,480 Income from continuing operations 442,320 Loss on discontinued operations 116,400 Net income $325,920 The loss on discontinued operations was comprised of a $48,500 loss from operations and a $67,900 loss from disposal. The income tax rate is 20% on all items. Prepare a correct statement of comprehensive income, beginning with...
In its first year of existence (year 1), SCC corporation (a C corporation) reported a loss...
In its first year of existence (year 1), SCC corporation (a C corporation) reported a loss for tax purposes of $30,000. How much tax will SCC pay in year 2 if it reports taxable income from operations of $20,000 before considering loss carryovers under the following assumptions? (New Corporate income tax rate has been mentioned as "21% on all taxable income" as per the recent change. Leave no answer blank. Enter zero if applicable.)
The following information pertaining Juniper Corporation is available for the year ended 2015,its first year of...
The following information pertaining Juniper Corporation is available for the year ended 2015,its first year of operations: : Pretax financial income, $200,000. Excess of tax deprecation over book depreciation equals $36,000 in 2015 (future taxable). This temporary difference (i.e., $36,000 depreciation expense) will be reversed as follows: $23,000 in 2016 and $13,000 in 2017. The tax rates of 2015, 2016 and 2017 are 30%, 25%, and 25%, respectively.   Instructions: Compute Juniper’s 2015 taxable income. Pretax accounting income                               $ 200,000 Less: additional...
Boots, Inc. is a “C” corporation engaged in the show manufacturing business. Boots is a Calendar...
Boots, Inc. is a “C” corporation engaged in the show manufacturing business. Boots is a Calendar year, accrual method taxpayer with two equal shareholders, Emil and Betty, who are unrelated cash method taxpayers. In answering the questions below, assume for convenience that Emil and Betty each are taxable at a combined federal and state flat rate of 40% on ordinary income and combined flat rate of 20% on qualified dividends and long-term capital gains. During the current year, Boots has...
Frazzle Inc is a C Corporation owned 50/50 by sisters Jean and Marie. Corporate policy is...
Frazzle Inc is a C Corporation owned 50/50 by sisters Jean and Marie. Corporate policy is to distribute all available cash to shareholders. Each shareholder is in the 35% marginal bracket and the corporation also pays a flat 21%. For the current year Frazzle earned $100,000. a. Calculate the corporate level federal income tax. b. Frazzle distributed the available cash to the shareholders (earnings less federal taxes) Calculate the shareholder’s federal tax. c. What is the total tax paid in...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT