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McGraw-Hill's Taxation of Business Entities 3rd Edition by Connie Weaver, Brian Spilker, Edmund Outslay, John Robinson, Ronald Worsham, Benjamin Ayers, John Barrick
Edition 3ISBN: 9780077924522McGraw-Hill's Taxation of Business Entities 3rd Edition by Connie Weaver, Brian Spilker, Edmund Outslay, John Robinson, Ronald Worsham, Benjamin Ayers, John Barrick
Edition 3ISBN: 9780077924522 Exercise 16
For the current year, CCP Inc. received the following interest income:
• $12,000 interest from Irvine City bonds: Bonds issued in 2006 and proceeds used to fund public schools.
• $20,000 interest from Fluor Corporation bonds.
• $8,000 interest from Mission Viejo City: Bonds issued in 2008 and proceeds used to lure new business to the area.• $6,000 interest from U.S. Treasury notes.
a. What amount of this interest income is taxable to CCP
b. What amount of interest should CCP report as a preference item when calculating its alternative minimum tax liability
• $12,000 interest from Irvine City bonds: Bonds issued in 2006 and proceeds used to fund public schools.
• $20,000 interest from Fluor Corporation bonds.
• $8,000 interest from Mission Viejo City: Bonds issued in 2008 and proceeds used to lure new business to the area.• $6,000 interest from U.S. Treasury notes.
a. What amount of this interest income is taxable to CCP
b. What amount of interest should CCP report as a preference item when calculating its alternative minimum tax liability
Explanation
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Income tax formula
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McGraw-Hill's Taxation of Business Entities 3rd Edition by Connie Weaver, Brian Spilker, Edmund Outslay, John Robinson, Ronald Worsham, Benjamin Ayers, John Barrick
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