Questions from Taxation

Q: For the current year, Harbor Corporation earned before-tax income

For the current year, Harbor Corporation earned before-tax income of $776,000. Harbor operates in a single state with a 10 percent state income tax rate. a. Compute Harbor’s state income tax liability...

Q: The Trio affiliated group consists of Trio, a New Jersey corporation

The Trio affiliated group consists of Trio, a New Jersey corporation, and its three wholly owned subsidiaries. This year, the four corporations report the following. Net Income (Loss) Trio …………………………...

Q: Comet operates solely within the United States. It owns two subsidiaries

Comet operates solely within the United States. It owns two subsidiaries conducting business in the United States and several foreign countries. Both subsidiaries are U.S. corporations. This year, the...

Q: Velox Inc. began operations last year. For its first two

Velox Inc. began operations last year. For its first two taxable years, Velox’s records show the following. Compute Velox’s U.S. tax for both years, assuming the...

Q: Minden Corporation’s records show the following results for its first three years

Minden Corporation’s records show the following results for its first three years of operations. In year 4, Minden generated $2 million taxable income ($900,000 of which was foreig...

Q: Cheeta Corporation earned $5 million this year from both domestic and

Cheeta Corporation earned $5 million this year from both domestic and international operations. Assume $2.2 million of this income qualifies as foreign-derived intangible income (FDII). If Cheeta paid...

Q: This year, Tuna, Inc., a domestic corporation, earned

This year, Tuna, Inc., a domestic corporation, earned $3 million from sales of goods to unrelated foreign customers. If Tuna has $12 million of depreciable assets, calculate its foreign-derived intang...

Q: Firm H has the opportunity to engage in a transaction that will

Firm H has the opportunity to engage in a transaction that will generate $100,000 cash flow (and taxable income) in year 0. How does the NPV of the transaction change if the firm could restructure the...

Q: Omaha Inc. owns 100 percent of the stock in Franco,

Omaha Inc. owns 100 percent of the stock in Franco, a foreign corporation. All Franco’s income is foreign source, and its foreign income tax rate is 20 percent. During its fiscal year ended June 30, 2...

Q: Dixie Inc., a Tennessee corporation, conducts business in South America

Dixie Inc., a Tennessee corporation, conducts business in South America through two foreign corporations, Dix-Col Inc. and Dix-Per Inc. Dixie formed Dix-Col six years ago and owns 100 percent of its s...