Question

PWD Incorporated is an Illinois corporation. It properly included, deducted, or excluded the following items on its federal tax return in the current year: Item Amount Federal Treatment Illinois income taxes $ 33,410 Deducted on federal return Indiana income taxes $ 18,445 Deducted on federal return Ohio Commercial Activity Tax $ 3,978 Deducted on federal return Illinois municipal bond interest $ 9,956 Excluded from federal return Indiana municipal bond interest $ 15,275 Excluded from federal return Federal T-note interest $ 2,478 Included on federal return PWD's federal taxable income was $111,000.

Calculate PWD's Illinois state tax base.

A. $126,967
B. $141,932
C. $142,242
D. $175,652

Answer 1

Answer:

PWD's Illinois state tax base is $175,652. The right answer is D.

Explanation:

According to the given data, in order to calculate the PWD's Illinois state tax base, we would have to make the following calculation with the following formula:

PWD's Illinois state tax base = Federal taxable income+Indiana income taxes+Illinois income taxes+Indiana municipal bond interest – federal t-note interest

Therefore,PWD's Illinois state tax base=$111,000+ $18,445+33,410+$15,275-$ 2,478

PWD's Illinois state tax base=$175,652