Reconcile Book Income To Taxable Income

Question 1

Reconcile book income to taxable income:

Increase book income for income items in tax return not included in book income. 3 examples

Answer 1

1 prepaid rents

2 royalties

3 interest

Question 2

Reconcile book income to taxable income:

Increase book income by expenses deducted on books but not on tax return, 3 examples

Answer 2

1 amount of business gifts in excess of $25

2 Nondeductible life insurance premiums paid

3 50% of business meals and entertainment

Question 3

Reconcile book income to taxable income:

3 items deducted from book income

Answer 3

1 income reported on books but not on tax return

2 expenses deducted on tax return but not on books

3 dividends received deduction

Question 4

Reconcile book income to taxable income:

Subtracted: expenses deducted on tax return but not on books 2 examples

Answer 4

1 MACRS depreciation above straight line

2 charitable contribution carryover

Question 5

Reconcile book income to taxable income:

Subtracted: income reported books but not on tax return 2 examples

Answer 5

1 tax exempt interest

2 life insurance proceeds

Question 6

If you begin with book income to calculate taxable income:

Increase book income by…5

Answer 6

1 federal income tax expense
2 net capital loss
3 income items only in tax return
4 charitable contribution in excess of 10% limitation
5 expenses deducted on books but not on tax return