Questions from Taxation

Q: TGW, a calendar year corporation, reported $3,908

TGW, a calendar year corporation, reported $3,908,000 net income before tax on its financial statements prepared in accordance with GAAP. The corporation’s records reveal the following information: TG...

Q: A&Z incurred $450,000 of capitalized costs to

A&Z incurred $450,000 of capitalized costs to develop a uranium mine. The corporation’s geologists estimated that the mine would produce 900,000 tons of ore. During the year, 215,000 tons were extract...

Q: Jonson Corporation incurred $150,000 in capitalized acquisition costs to

Jonson Corporation incurred $150,000 in capitalized acquisition costs to develop an oil well. The corporation’s geologists estimated that there were 200,000 barrels of oil in the well at the beginning...

Q: In year 1, Firm A paid $50,000 cash

In year 1, Firm A paid $50,000 cash to purchase a tangible business asset. In year 1 and year 2, it deducted $3,140 and $7,200 depreciation with respect to the asset. Firm A’s marginal tax rate in bot...