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Book Balance Adjustment Book Balance Adjustment Trial Balance Tax Return
Description DR CR DR CR DR CR DR CR DR CR Summary Tic Marks
3,622,000 3,622,000 108,818 108,818 3,715,818 3,715,818 341,318 341,318 3,715,818 3,715,818
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Schedule M-1: Reconciliation of income (Loss) per books with Income per Return.
1. Net Income (loss) per books: 450,182 The Tax-obligation payment is calculated
2. Federal Income Tax per books: 240,550 The FIT payment throughout the year w
3. Excess of Capital losses over cap gains: 2,000 The sum of these payments was under t
4. Income Subject to tax not recorded on books this year: Capital losses can only offset capital gain
5. Expenses recorded on books this year, not deducted on this return: then forward five years to offset Cap gai
a. Depreciation: Book Depreciation was less than tax trea
b. Charitable Contributions Charitable contributions were fully dedu
c. Travel & Entertainment: 5,000 The treatment of the Bengals box under
d. Other (itemize): For the tickets, the section before: IRC 2
Bad Debt Expense 4000 Actual Bad Debt Expense is deductible u
Tax Penalty assessed 3268 Underpayment penalty is calculated in t
Key employee Life Insurance: 10,000 22,268 Life Insurance Premiums are not deducti
6. Add lines 1-5: 715,000
7. Income recorded on books this year but not included on this return.
a. Tax exempt interest:
b. Other: Itemize
8. Deductions on this return not charged against book income this year.
a. Depreciation: 10,000 Depreciation was 50K under tax treatme
b. Charitable Contributions: The amounts will resolve when the asse
c. Other (Itemize):
10,000
9. Add lines 7 and 8: 10,000
10. Income - line 6 less line 9: 705,000
bligation payment is calculated in the sheet following.
ayment throughout the year was 150,000, paid on time.
of these payments was under the actual liability. Temporary
sses can only offset capital gains. Will carried back 3 years,
ard five years to offset Cap gains. T, but P if they expire
reciation was less than tax treatment. Not added back
e contributions were fully deductable. See Calculations.
ment of the Bengals box under IRC 274(l)(2)- Skyboxes
ckets, the section before: IRC 274(l)(1)(A), Permanent
d Debt Expense is deductible under IRC 166(d)(2) Temporary
ment penalty is calculated in the following sheets. Temporary
ance Premiums are not deductible under IRC 264. Permanent
Corporation required to pay 100% of current year tax under IRC 6655, the penalty rate for underpayment is derived from IRC 6
Underpayment Penalty Statemen
The depreciation under MACRS was 10,000 more than BV. (50K-40K)
The tentative dividends received deduction is limited to 70% when owning <20% of stock. IRC 243(a)(1)
The dividends received deduction is limited to 70% of Corporation's taxable income. IRC 246(b)
Dividend Received Deduction
Step 1: Tentative DRD
Dividend Received 5,000
70% Limitation 3,500
Step 4: Compare
Tentative DRD 3,500
Taxable Income Limitatio 497,700.0
Choose the lower 3,500
82774 6% 0
37500 45274 6% 92 685
105412 6% 0
37500 67912 6% 15 1016
128050 6% 0
37500 90550 6% 90 1340
90550
3268