Final answer:
The corporate contribution limit for Shatner, Inc. would be 10% of the taxable income adjusted for the dividends received deduction and the NOL carryforward, which calculates to $10,800. None of the provided options (a. $42,000, b. $52,000, c. $70,000, d. $100,000) match this value.
Step-by-step explanation:
Shatner, Inc. has correctly computed its taxable income before considering any charitable contributions as $70,000. However, to calculate the corporate contribution limit, two adjustments are required. The dividends received deduction of $10,000 and the net operating loss (NOL) carryforward of $28,000 must be added back to the taxable income because these amounts were previously deducted to arrive at the taxable income.
Therefore, the calculation for Shatner's corporate contribution limit would be $70,000 (taxable income) + $10,000 (dividends received deduction) + $28,000 (NOL carryforward), resulting in a total of $108,000.Charitable contributions for corporations are generally limited to 10% of their taxable income computed without regard to the dividends received deduction and the NOL carryforward.
This suggests that the corporate contribution limit for Shatner, Inc. would be 10% of $108,000, which is $10,800. However, since the options provided (a. $42,000, b. $52,000, c. $70,000, and d. $100,000) do not include $10,800, the question seems to contain a mistake or may be incomplete. If this was a multiple-choice question, none of the given options would be accurate.