NINJA SIMS

Question 1

When any property is sold under the installment method, E&P

Answer 1

is computed as if the selling corporations did not use the installment method

Gain/loss included in E&P in the year of the sale.

Gain/loss must be removed from taxable income in subsequent years.

Question 2

E&P and
increase in cash surrender value of life insurance policies
and tax-exempt income

Answer 2

E&P should include all items of income or gain resulting from the economic activities of the corporation.

Although not included in the taxable income of the corporation, considered a gain from the economic activities of the corporation and should increase E&P.

Question 3

For an accrual-basis corporation, the corporation’s tax liability and E&P

Answer 3

Subtract from taxable income - should be reflected in E&P as of the close of the taxable year to which the tax relates (Regulation Section 1.312-6(a)).

Question 4

For an accrual-basis corporation, the corporation’s prior year tax refund and E&P

Answer 4

No effect on CY E&P - included in taxable income (and E&P) in the year it was accrued and would not affect the current year’s E&P.

Question 5

2014 mileage reimbursement rate

Answer 5

.565 per mile

deduct excess over company reimbursement as an an unreimbursed deduction subject to 2% floor on Sched A.