Question

Initiate, Inc. a 501 organization, receives the following revenues and incurs the following expenses. Grant from Gates Foundation 70,000 Charitable contributions received 625,000 Expenses in carrying out its exempt mission 500,000 Net income before taxes of landscaping inc. 400,000 a wholly owned for profit subsidiary Landscaping Inc. remits all of its after tax profits each year to Initiate. Calculate the amount of the Federal income tax, if any, for Initiate for Landscaping.

Answer 1

Answer:

136,000

Explanation:

Calculation to the amount of the Federal income tax, if any, for Initiate for Landscaping.

Based on the information given the amount of $400,000 will be subjected to the corporate income tax rates totaling the amount of $136,000 which is calculated as ($400,000 x 34%).

Therefore the amount of the Federal income tax, if any, for Initiate for Landscaping will be $136,000