Tarass Inc. is an accrual-method calendar-year corporation. Tarass, Inc. did not qualify for the domestic production activities deduction. The following information has been provided about the activities occurring in 2013: Reported on the financial statement â income after taxes $2,585,000 Life insurance proceeds from CFOâs death 100,000 Revenue from sales 3,500,000 Key-person life insurance policies premium 15,000 Cost of goods sold (reported on book) 275,000 MACRS depreciation 65,000 Book depreciation 40,000 AMT depreciation 60,000 Interest income on private activity tax-exempt bonds 25,000 Interest paid on loan to purchase tax-exempt bonds 25,000 Net capital loss 35,000 Rental income received and earned in 2013 5,000 Rental income received in 2012 but earned in 2013 10,000 Rental income received in 2013 but not earned 5,000 Overhead costs expensed for financial reporting but are included in ending inventory for tax purposes under 263A4 5,000 Overhead costs expensed for financial reporting in 2012 but included in 2012 ending inventory. All 2012 ending inventory was sold in 2013. Charitable contributions 315,000 Federal income tax expense reported on financial statements 350,000 Using the information provided, complete the following tasks: Using Excel, prepare a reconciliation of book income and tax income. Set up the Excel spreadsheet using the example below: Line Item Book Income (Dr) Cr Book-tax adjustments Taxable Income (Dr) Cr (Dr) Cr Calculate Tarass Inc.âs tax liability for 2013. Calculate Tarass Inc.âs alternate minimum tax for 2013, if any applies. The calculation must be shown to receive full credit.
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