OMG corp. ceased operations in September of 2014 after being in business for over a decade with a fiscal year ending March 31; and distributed its remaining assets to its shareholders in October 2014. OMG’s final tax return for the year beginning on April 1st and ending on Sept. 30 reported $120,000 taxable income.
Instruction:
A) Compute OMG Inc’s tax for its last year using the corporate tax rates in the book.
B) Assume that OMG operates an ongoing business and filed the short-period return described above because the IRS granted permission to change from a fiscal year ending March 31th to a fiscal year ending September 30th . How does this change in fact affect the tax computation?