Ariodante, Inc., is a Florida Corporation which uses the accrual-method basis of accounting. For its most recent year it reported taxable income of $2,550,000.00.
Making up the computation of taxable income were the following items.
Earnings and Profits Depreciation of $250,000.00
Corresponding MACRS Depreciation was $150,000.00
A Net capital Loss Carryover of $ 15,000.00
A Net Operating Loss Carryover of $ 30,000.00
A capital gain from the distribution of Land
(see below)
Not included in the computation of
taxable income were the following items:
Tax Exempt Income $ 10,000.00
Life Insurance Proceeds $300,000.00
Excess current year charitable contribution
to be carried over to next year $ 3,000.00
Tax-deferred gain of $25,000
on a like-kind exchange $ 25,000.00
Nondeductible life insurance premium $ 4,500.00
Nondeductible interest expense $ 1,000.00
At the Beginning of the corporation’s accounting year
E&P was $2,500,000.00
During the Accounting Year Ariodante, Inc., made
The following distributions:
Cash Distribution to Shareholders of $ 75,000.00
Distribution of Property subject to
Indebtedness to shareholders in equal shares
FMV or Property: $90,000.00
Basis of Property $15,000.00
Mortgage (assumed equally by Shareholders) $25,000.00