In: Accounting
According to the following 2017 data for Floyd Company, a closely held corporation, what its taxable income?
Net passive loss: $5,000
Net active income: $3,000
Net portfolio income: $4,000
a) $2,000
b) $3,000
c) $4,000
d) $7,000
Correct Answer (B) $3000.
Explanation
Calculation of Taxable Income
Net Portfolio Income |
$ 4,000.00 |
Less: Setoff of Passive Loss upto maximum portfolio income |
$ (4,000.00) |
Add: Passive Income |
$ 3,000.00 |
Net Taxable Income |
$ 3,000.00 |
Notes