Question

Compute the income tax liability for each of the following unrelated C corpo- rations.

a. Darter Corporation has taxable income of $68,000.
b. Owl Corporation has taxable income of $10,800,000.
c. Toucan Corporation, a personal service corporation, has taxable income of $170,000.

Answer 1

Answer and Explanation:

The computation of the income tax liability for each situation is given below:

a. Tax Liability on Darter Corporation is

= 21% of $68,000

= $14,280

b. Taxable liability On Owl Corporation is

= 21% of $10,800,000

= $2,268,000

c. Tax liability on On Toucan Corporation, a personal service corporation is

= 21% of $170,000

= $35,700

In this way it should be calculated