McGraw-Hill's Taxation of Business Entities 3rd Edition by Connie Weaver, Brian Spilker, Edmund Outslay, John Robinson, Ronald Worsham, Benjamin Ayers, John Barrick

Exercise 42

Gator, Inc. reported taxable income of $1,000,000 in 2011 and paid federal income taxes of $340,000. Included in the company's computation of taxable income is gain from sale of a depreciable asset of $50,000. The income tax basis of the asset was $100,000. The E P basis of the asset using the alternative depreciation system was $175,000. Compute the company's current E P for 2011.