Leah Pasternak Federal Taxation ACC317 Chapter 17: Corporations: Introduction and Operating Rules Homework Submission 29 a.

. Tanagers taxable income for the year is $105,000 and their tax for the year is $24,200 b. Assuming Tanagers long-term capital gain was $15,000 and their short-term capital loss was still $40,000, Tanagers taxable income for the year would be $90,000 and their tax for the year would be $18,850 41. The maximum amount of expenditures that Egret can deduct in 2013 is $5,000 since these are considered startup expenditures. Egret would treat these costs the same way they would treat organizational expenditures in that they are able to expense the first $5,000 of the costs immediately and then amortize the remaining amount of $36,500 over a 180-month period. 42. Purple Corporation Azul Corporation Pink Corporation Turquoise Corporation Teal Corporation Taxable Income $65,000 $290,000 $12,350,000 $19,000,000 $130,000 Tax Liability $11,250 $96,350 $4,222,500 $6,670,000 $33,950

43. Seeing as the controlled group does not make an election regarding the apportionment of the marginal tax brackets, the tax liability for each corporation would be as follows: Red Corporation Taxable Income - $130,000 Tax Liability - $33,950 White Corporation Taxable Income - $200,000 Tax Liability - $61,250

*Not electing to file a consolidated return they experienced a tax savings of $16,750. 45. Sparrow Corporations taxable income for year 2013 is $257,300.