23. Pink Corporation is an accrual basis taxpayer that uses the recurring item exception to the econ
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Port FolioFebruary 17, 2021Discussion 13 19915143 – My Perfect TutorsFebruary 17, 2021 23. Pink Corporation is an accrual basis taxpayer that uses the recurring item exception to the economic performance test for all relevant years. For 2019, the corporation's income subject to state income tax was $500,000 and the state corporate tax rate was 6%. During 2019, the corporation paid $24,000 on its estimated state income tax liability for that year. The remaining $6,000 of 2019 state income tax was paid in April 2020. In June 2019, the corporation paid $9,000 on its year 2018 state income tax liability as a result of an audit of the 2018 return that was conducted in 2019. The company has elected to use the recurring item exception to economic performance. As a result of these facts, the corporation should deduct in 2019 on its Federal income tax return state income taxes of: a. $24,000. b. $30,000 c. $33,000. d. $39,000 e. None of these. “Looking for a Similar Assignment? Get Expert Help at an Amazing Discount!” “Is this question part of your assignment? We Can Help!”
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