Capital corporations taxable income


Capital Corporation had the following results in 2012:

Gross receipts from operations: $200,000
Net short-term capital gain:        $50,000
Net long-term capital loss:       ($75,000)
Cost of goods sold:                   $60,000
Operating expenses:                 $40,000

Dividends received from 30% owned domestic corporation: $80,000

What is Capital Corporation's taxable income and regular income tax liability for 2012?

Assuming that Capital Corporation's taxable income in 2011, its first year of existence, was $400,000, which included a net short-term capital gain of $50,000, what advice should be given to Capital with respect to its net capital asset position for 2012?

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Accounting Basics: Capital corporations taxable income
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