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(4 points) Assume that estimated taxable income after adjusting for permanent and temporary differences is $128,000. What is the current income tax expense applying the appropriate current tax rate for corporations in Year 1 given the current corporate tax rate is a flat 21%?

(1 point) For the following scenario, determine the dollar amount of the book-tax difference (if any) written as a positive number in 2015. On January 1, 2015, Landmark Corporation offered its CFO 2,800 NQOs options to purchase the company’s at the same price offered by the public market on that day, $8/share, at any date in the future after the CFO vests. The CFO will vest 25% of its options in 2015, 25% in 2016, and vest the remaining portion in 2017. The CFO promptly exercised all of his options on December 31, 2017 when he was 100% vested and turned around and sold all the shares for $15/share on the public market. Assume that on the grant date, Landmark Corporation estimated the value of the options would be $7/share. The company uses a calendar year tax period.

(1 point) Cost Recovery Methods – What cost recovery method (if any) should be used for costs from the purchase of a work desktop computer?

(1 point). For the following scenario, determine whether the related book-tax difference (if any) is favorable or unfavorable. Ramco Tooling purchased new equipment on January 1, Year 1 for $97,500. In Year 1, Ramco took $27,000 in Sec. 179 expense on the equipment and $15,000 in bonus depreciation on the equipment. In addition, it took $21,000 in regular MACRS depreciation on the equipment in Year 1. For book purposes, Ramco estimates the useful life of the equipment is 10 years and uses straight-line depreciation.

(4 points) Regal Corporation assessed that $280,500 of its research tax credit on its current year tax return was uncertain, but that it was more likely than not to be sustained on audit. Management at Regal determined the following assessment of the company’s potential tax benefit from the credit and its probability of occurring. Potential Estimated Benefit Individual Probability of Occurring (%) Cumulative Probability of Occurring (%) $280,500 21% 21% 265,000 13 34 175,000 19 53 121,000  25 78 0 22 100   Based on the above scenario, what is the portion of the $325,000 credit that will be unrecognized (require a liability) for uncertain tax positions?

(1 point). For the following scenario, determine the dollar amount of book-tax difference (if any) written as a positive number. Ramco Tooling purchased new equipment on January 1, Year 1 for $97,500. In Year 1, Ramco took $27,000 in Sec. 179 expense on the equipment and $15,000 in bonus depreciation on the equipment. In addition, it took $21,000 in regular MACRS depreciation on the equipment in Year 1. For book purposes, Ramco estimates the useful life of the equipment is 10 years and uses straight-line depreciation.

(4 points) Total depreciation – A dentistry office purchased a new computer for the reception desk on February 5, 2024 and a new set of bookshelves (considered office furniture) for the dentist office’s front entryway on November 5, 2024. The computer and bookshelves each cost $3,100. Determine the total depreciation amount for 2024 assuming the taxpayer opted out of Sec. 179 and bonus (if available) in the year of purchase. In addition, assume all taxpayers use a calendar year tax period and that the property mentioned was the only property purchased in the year of acquisition. Use the appropriate depreciation table from your note sheet/textbook where necessary.

(4 points) Total depreciation – A hotel purchased a new office desk on April 15, 2022 and new executive style chairs for the office on August 5, 2022. The office desk cost $1,200 and the chairs cost $2,400. Determine the total depreciation amount for 2024 assuming the taxpayer opted out of Sec. 179 and bonus (if available) in the year of purchase. In addition, assume all taxpayers use a calendar year tax period and that the property mentioned was the only property purchased in the year of acquisition. Use the appropriate depreciation table from your note sheet/textbook where necessary.

(1 point). For the following scenario, determine the dollar amount of book-tax difference (if any) written as a positive number. Patriot Construction Co. received $11,500 in interest income on a municipal bond it holds for the city of Falls Church during the year.

(1 point) Cost Recovery Methods – What cost recovery method (if any) should be used for costs from the purchase of a patent?