R4-M3 Differences Between Book and Tax

Question 1

are state franchise tax refunds considered taxable income for C corp?

Answer 1

YES

Question 2

what is tax treatment for warranty expenses?

Answer 2

• c corp may deduct the actual amount of cost incurred in meeting their warranty obligations. ex: beginning 120, accrued in CY 16, ending 90, so the actual warranty incurred is 120+16-90=46