22.

a. The amount deductible is $12,000 that is deductible in 2019. None of the net capital
loss is deductible because a corporation cannot deduct net capital losses.
b. The amount that is carried forward is $7000 ($12,000 - $5,000). $2,500 is not allowed
as deduction as the current year loss moves 3 years for carryback.

25.
In this case, C is a closed Corporation as a result of which it can neutralize the passive
loss suffered against the active gains against the income generated from portfolio
investment. The company is having an opportunity to deduct $40,000 of the loss but not
the entire $45,000. Also, Computation of the taxable income of H is shown below:
Taxable Income = (Active Income + Interest Revenue – Deductions)
= ($40,000 + $15,000 - $40,000)
= $15,000 taxable income
So it is ascertained that the taxable income of the C corporation accounts for $15000

29.
a. Corporations are taxed by flat rate of 21%. The total tax liability for Darter
Corporations would be $14,280.

b. Owl Corporation has taxable income of $10,800,000. Subsequently the introduction

of the TCJA, Corporation are taxed at a flat rat of 21%. The total tax liability for Darter
Corporation would be 2,268,000.

c.170,000 * 21% = 35,700 in tax

30.

a. Under a proprietorship, Riflebird Company would report its income, gains,

deductions, and losses on Roger’s individual tax return Form 1040. Roger would report
$45,000 of net profit $220,000 of operating income less $175,000 in operating
expenses, as well as the $10,000 long term capital loss subject to the loss limitations
applicable to individuals.
 b. Riflebird Company would be a separate taxable entity, they would report their
income gains, deductions, and losses on a separate tax return Form 1120. Riflebird
Company would report $45,000 of net profit. Corporations cannot deduct a net capital
loss and as such the long-term capital loss would be subject to capital loss carryover
rules. Roger would be a shareholder and as such would not report anything until a
dividend is given.

35.
a. $84,000
The salary for the deferral period (October 1 through December 31) must be at least
proportionate to the employee’s salary received for the prior fiscal year. The amount
that Carmine Corporation must pay Juan during the period October 1through December
31, 2013, to permit Carmine to continue to use its fiscal year without negative tax
effects, is $84,000 ($336,000 × 3/12).

b. Carmine Corporation would pay a flat rate of 21% on its taxable income of $95,000.
The total tax liability for the year would be $19,950.