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

Exercise 3

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.