Calculate calzone trucking''s 2011 taxable income


Calzone Trucking Company is a corporation that is 100% owned by Fred Calzone. Before he incorporated in 2008, Fred had operated the business as a sole proprietorship. The taxable income (loss) of Calzone for 2008 through 2010 is as follows: 2008 2009 2010 Taxable income (loss) $32,000 $(64,000) $18,000 The 2010 taxable income includes a net long-term capital gain of $4,000. Calzone Trucking's 2011 operating income is $43,300 before considering the following transactions: a. A hailstorm caused part of the roof of the truck barn to collapse. A truck inside sustained damage from the falling debris. The truck barn had a fair market value of $59,000 before the damage and an adjusted basis of $35,000. Repairs to the roof cost $13,200, of which $9,700 was reimbursed by insurance. The truck, which had an adjusted basis of $35,000, was worth $62,000 before the damage and had a fair market value after the damage of $37,000. Calzone Trucking's insurance company paid $16,600 for the damages. b. Another truck was totally destroyed when its brakes failed and it plunged off a cliff. Fortunately, the driver was able to jump from the truck and escaped unharmed. The truck, which had an adjusted basis of $24,000, was worth $30,000 before the accident. Calzone received $13,700 from its insurance company for the destruction of the truck. In addition, the company was cited for failure to properly maintain the truck and paid a $7,250 fine to the state trucking commission. c. Calzone sold equipment that had become obsolete for $10,800. The equipment had cost $28,000, and depreciation of $15,400 had been taken on it before the sale. d. Calzone sold stock it owned in two other companies. Retro Corporation stock, which had cost $21,400, sold for $36,200. Shares of Tread Corporation stock with a cost of $62,100 sold for $31,700. Both stocks had been purchased in 2007. e. Fred's son wanted to start a delivery business. To help his son out, Fred sold him one of Calzone's used trucks for $8,000. The truck had a fair market value of $15,200 and an adjusted basis of $10,100 at the date of the sale. Calculate Calzone Trucking's 2011 taxable income. Indicate the amount and the effect of any carryforwards

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Accounting Basics: Calculate calzone trucking''s 2011 taxable income
Reference No:- TGS050639

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