Question

D CORPORATION HAS BOOK INCOME OF 500,000 BEFORE FEDERAL TAXES. EXPENSES ORGANIZATIONAL COSTS IN YEAR INCURRED FOR BOOK PURPOSES OVER 15 YEAR FOR TAX PURPOSES

. CORPORATION WAS ORGANIZED THIS YEAR AND HAD 90,000 OF ORGANIZATIONAL COSTS, WHAT IS TAXABLE INCOME FOR SCHEDULE M1

416000

506000

584000

590000

Answer 1

A	Book Income before Federal Taxes	$              500,000.00
B	Organisational cost [add, since the same has been deducted in above]	$                 90,000.00
C= A + B	Total	$              590,000.00
D = $ 90000 / 15 years	Organisational cost allowed to be deducted as per Tax purpose	$                   6,000.00
E = C - D	Taxable Income	$              584,000.00

* Hence correct option is Option 3rd: $ 584,000