Bass Corp has incurred taxable income for the current year o

Bass Corp has incurred taxable income for the current year of $10,000 which includes a dividends received deduction of $500. Bass also received $1,200 of tax exempt interest income for the current year. What is the amount of Bass\' earnings and profits for the current year? A. $9,500 B. $10,000 C. $11,200 D. $11,700

Solution

A corporation receives 100% of the DRD as deduction . Tax exempt income is anyway not considered for earnings and profit for the current year.

Taxable Income = $10,000 - $500= $9500

The correct option is (A), $9500.