Question

In: Accounting

im trying to complete a 2019 corporate tax return form 1120 for my class, ill try...

im trying to complete a 2019 corporate tax return form 1120 for my class, ill try to post this in as many questions as i can.

2019 2018
Property and Equipment:
Equipment $          1,301,267                 931,764
Less: Accumulated depreciation                  397,056                  904,211                 293,233                         638,531

the company's depreciation expense for tax purposes is $115,000.

book depreciation expense was not given, if i were to use the difference of accumulated depreciation then the book depreciation would be $103,823

should the difference between tax and book depreciation be input on the schedule M1? if so is it line 5a, or 8a?

or am i way over thinking this?

Solutions

Expert Solution

Concept:

Schedule M-1 is the reconciliation of book Income to taxable income. Differently for generally accepted accounting principles and tax purposes.

Schedule M-1 is part of form 1120 also known as C-CORPORATION Income tax return.

Difference between depreciation as per book and depreciation as per tax rules is called temporary difference which can be charged against or revered from taxable income in future.

Main Answer:

In given case depreciation as per tax is higher than depreciation as per book by $ 11,177 ( $ 115,000 depreciation as per tax - $ 103,823 depreciation as per book ) must be reported in schedule M-1 on LINE 8 a because the amount of book depreciation is lower than tax so it is charged against book income. But we claim that as deduction in tax return

.

Additional information:

Line 5 a will be applicable in reverse situation in which depreciation as per book will be higher than depreciation as per tax which means expenses recorded in book but not claimed as deduction in the return.


Related Solutions

Corporate Tax Return Required: Complete Alvin’s Music Inc.’s (AMI) 2019 Form 1120, Schedule D, and Schedule...
Corporate Tax Return Required: Complete Alvin’s Music Inc.’s (AMI) 2019 Form 1120, Schedule D, and Schedule G (if applicable) using the information provided below. Neither Form 4562 for depreciation nor Form 4797 for the sale of the equipment is required. Include the amount of tax depreciation and the tax gain on the equipment sale given in the problem (or determined from information given in the problem) on the appropriate lines on the first page of Form 1120. If any information...
Corporate Tax Return Project Complete Form 1120 pages 1 and 2, Schedule D, Form 8949 and...
Corporate Tax Return Project Complete Form 1120 pages 1 and 2, Schedule D, Form 8949 and complete Schedule M-1 on page 5 of a 2018 Form 1120 for the following taxpayer using the information that follows: For purposes of this project only, do not attach other forms as required by certain lines of Form 1120. Taxpayer Information: Champion, Inc. is an accrual-basis, calendar-year corporation that operates five local “sports merchandise-stores”.   Champion was incorporated on February 28th, 2017 Champion’s main office...
Corporate Tax Return Problem 1 Required: Complete Alvin’s Music Inc.’s (AMI) 2016 Form 1120, Schedule D,...
Corporate Tax Return Problem 1 Required: Complete Alvin’s Music Inc.’s (AMI) 2016 Form 1120, Schedule D, and Schedule G (if applicable) using the information provided below. Neither Form 4562 for depreciation nor Form 4797 for the sale of the equipment is required. Include the amount of tax depreciation and the tax gain on the equipment sale given in the problem (or determined from information given in the problem) on the appropriate lines on the first page of Form 1120.Page C-14...
During the current year, Heaton Corporation which properly files a Form 1120 (C-corp) tax return is...
During the current year, Heaton Corporation which properly files a Form 1120 (C-corp) tax return is totally liquidated. Upon liquidation Heaton Corporation distributes its only asset, land to Paul, who is the sole shareholder. On the date of distribution, the land has a basis to Heaton Corporation of $250,000, a fair market value of $650,000, and is subject to a liability of $300,000. Paul, who takes the land subject to the liability, has a basis of $135,000 in his Heaton...
Complete Alvin’s Music Inc.’s (AMI) 2019 Form 1120, Schedule D, and Schedule G (if applicable) using...
Complete Alvin’s Music Inc.’s (AMI) 2019 Form 1120, Schedule D, and Schedule G (if applicable) using the information provided below. Neither Form 4562 for depreciation nor Form 4797 for the sale of the equipment is required. Include the amount of tax depreciation and the tax gain on the equipment sale given in the problem (or determined from information given in the problem) on the appropriate lines on the first page of Form 1120. If any information is missing, use reasonable...
plz answer all of them. my test is due in a hour and im trying to...
plz answer all of them. my test is due in a hour and im trying to pass 1.Suppose that the average and standard deviation of the number of points scored in an NBA game per player are 17.06 and 6.42, respectively. Calculate an interval that is symmetric around the mean such that it contains approximately 68% of players scores. Assume that the points scored has a normal distribution. 2. The daily stock price for International Business Machines (IBM) historically has...
Complete the federal tax return below for 2016. Use Form 1040, Schedule A, Schedule B, and...
Complete the federal tax return below for 2016. Use Form 1040, Schedule A, Schedule B, and Form 2441 to complete this return. You can print these forms off of the IRS website by going to irs.gov and searching for the forms. Lucy and Ricky Van have one child, Leroy, who is 5 years old. The Vans reside at 1234 Huckleberry Street, Kathleen, GA 31047. Ricky’s Social Security number is 577-11-3322, Lucy’s is 477-98-4735, and Leroy’s is 589-22-1142. Lucy and Ricky’s...
FOR 2019 TAX In 2019, Carson is claimed as a dependent on his parents' tax return....
FOR 2019 TAX In 2019, Carson is claimed as a dependent on his parents' tax return. Carson's parents provided most of his support. a. Carson is 17 years old at year-end and earned $14,600 from his summer job and part-time job after school. This was his only source of income. b. Carson is 23 years old at year-end. He is a full-time student and earned $14,600 from his summer internship and part-time job. He also received $6,090 of qualified dividend...
Please Complete the federal tax return below for 2016. Use Form 1040, Schedule A, Schedule B,...
Please Complete the federal tax return below for 2016. Use Form 1040, Schedule A, Schedule B, and Form 2441 to complete this return. You can print these forms off of the IRS website by going to irs.gov and searching for the forms. Take a screenshot of each form. Please only answer if you have the completed forms...........Lucy and Ricky Van have one child, Leroy, who is 5 years old. The Vans reside at 1234 Huckleberry Street, Kathleen, GA 31047. Ricky’s...
Please complete the 2019 federal income tax return for Alice J. and Bruce M. Byrd. Alice...
Please complete the 2019 federal income tax return for Alice J. and Bruce M. Byrd. Alice J. and Bruce M. Byrd are married taxpayers who file a joint return. Their Social Security numbers are 123-45-6784 and 111-11-1113, respectively. Alice’s birthday is September 21, 1971, and Bruce’s is June 27, 1970. They live at 473 Revere Avenue, Lowell, MA 01850. Alice is the office manager for Lowell Dental Clinic, 433 Broad Street, Lowell, MA 01850 (employer identification number 98-7654321). Bruce is...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT