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Earnings and Profits Tx 8120

Fore Objectives. Explain the _______ of E

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Earnings and Profits Tx 8120

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    1. Earnings and Profits Tx 8120

    2. Fore Objectives Explain the _______ of E&P, Determine whether E&P must follow _____ or ________ basis rules. Identify differences between E&P and ________ _______, and Calculate ________ E&P.

    3. Earnings & Profits Code describes how certain transactions _____ E&P but does not _____ the concept Purpose: Measures ________-paying ability Represents how much can be distributed without dipping into _________ Not same as: Taxable income or _______ earnings

    4. Calculating Current E&P

    7. Exclusions Increasing CE&P These items are: ____ included in gross income But ________ ability to pay dividends Examples: ________ bond interest _____ insurance proceeds _______ income tax refund

    8. Deferrals Increasing CE&P Some deferrals require no adjustments: _________ exchanges _____________ conversions Transfers under _____ Installment sales method __________ : CE&P increased for ___________ gain when sold CE&P decreased for __________ gain in later years __________ contract method disallowed

    9. Nondeductibles Decreasing CE&P These items are: Not deductible for tax purposes But __________ ability to pay dividends Examples: ______ ______ tax paid _______ and fines _________ contributions and ______ expenses _________ person losses and expenses

    10. Nondeductibles Decreasing CE&P (continued) Interest expense related to _________ income _____ insurance premiums that corporate beneficiary pays for ____ employees Disallowed travel, ______, and _____________ Charitable contributions __ ____ of taxable income Net capital ______ _______ income tax

    11. Deductions Not Affecting CE&P These items are: Deductible in computing taxable income But do not ________ ability to pay dividends Dividend _________ deduction Carryover deductions from other years: Net _______ _____ deduction ___________ contribution deduction ________ loss deduction

    12. Deductions Not Affecting CE&P (continued) Excess depreciation: CE&P requires __________ over longer lives of __________ depreciation system CE&P requires ___________ over __ years for any amount “expensed” under §179 Excess depletion and amortization: ____ depletion required _____________ expenses are capitalized

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