Question

PWD Incorporated is an Illinois corporation. It properly included, deducted, or excluded the following items on its federal tax return in the current year: Item Amount Federal Treatment Illinois income taxes $ 33,361 Deducted on federal return Indiana income taxes $ 18,480 Deducted on federal return Ohio Commercial Activity Tax $ 3,992 Deducted on federal return Illinois municipal bond interest $ 9,984 Excluded from federal return Indiana municipal bond interest $ 15,100 Excluded from federal return Federal T-note interest $ 2,492 Included on federal return PWD's federal taxable income was $104,000. Calculate PWD's Illinois state tax base.

Answer 1

PWD's Illinois state tax base = $168,449

Step-by-step explanation:

DATA

Illinois income taxes = $33,361

indiana income taxes = $18,480

Illinois municipal bond interest = $9,984

Indiana municipal bond interest = $15,100

Federal T-note interest = $2,492

Federal taxable income = $104,000

PWD's Tax Base = ?

Solution

PWD's Illinois Tax base can be calculated as follows

Formula

Illinois state tax base = Federal taxable income+Indiana income taxes+Illinois income taxes+Indiana municipal bond interest – federal t-note interest

Illinois state tax base = $104,000 + $18,480 + $33,361 + $15,100 - $2,492

PWD's Illinois state tax base = $168,449