Flint Corporation is subject to a corporate income tax only in State X. The starting point in computing X taxable income is Fede

Question

3 years ago

11

Flint Corporation is subject to a corporate income tax only in State X. The starting point in computing X taxable income is Fede

ral taxable income which is $750,000. This amount includes a $50,000 deduction for state income taxes. During the year, Flint received $10,000 interest on Federal obligations. X tax law does not allow a deduction for state income tax payments. Flint’s taxable income for X purposes is:_________
a. $800,000.
b. $790,000.
c. $810,000.
d. $750,000.

Business

1 answer:

scZoUnD [109] · Answer 1 · 2022-09-12T17:25:21+03:00

Answer:

b. $790,000.

Explanation:

The computation of the taxable income for X purpose is shown below:

Federal Taxable income $750,000

Add: Deduction for state income taxes non-deductible $50,000

Less: Interest on federal obligations i.e. deductible $10,000

Taxable income $790,000

Hence, option b is correct