2012 Corporate Tax Rate Schedule (partial)
Taxable Income Greater Than	But Less Than Or Equal To	Tax Is	Of the amount exceeding
$0	$50,000	15%	$0
$50,000	$75,000	$7,500 + 25%	$50,000
$75,000	$100,000	$13,750 + 34%	$75,000
$100,000	$335,000	$22,250 + 39%	$100,000

JKEB Corporation has the following revenues and expenses for thecurrent tax year:

Sales revenue, net of returns . . . . . . . . . . . . . . . . .. . . . . . . . . .       $100,000

Dividend Income (less than 20% owned investees) . . . . . . . .. .         25,000

Cost of sales . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . ..          30,000

Normal business expenses . . . . . . . . . . . . . . . . . . . .. . . . . . . . .        40,000

1.      What is JKEBCorporation’s dividends-received deduction for the current taxyear?

2.      Assuming thatJKEB Corporation’s normal business expenses were $82,000 instead of$40,000, compute its dividends-received deduction for the currenttax year.

JKEB Corporation incurred the following capital gains and lossesin tax year 2012:

Short Term Capital Gain . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . ..           $20,000

Short Term Capital Loss . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . ..          (10,000)

Long Term Capital Gain . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . ..                5,000

Long Term Capital Loss . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . ..          (28,000)

JKEB’s prior corporate tax returns reflect the following netcapital gain/ (loss):

2008 - $6,000 gain

2009—$8,000 gain

2010—($3,000) loss

2011—$1,000 gain

3.      Calculate the netcapital gain (loss) for 2012. How is this reported on the 2012 Form1120?

4.      Calculate theamount of capital loss carryback (if any) to tax years 2008 through2011 inclusive.

5.      Calculate theamount of capital loss carryforward (if any) to 2013. How will thisloss be treated in 2013 (i.e., as a short-term or long-term capitalloss)?

JKEB Corporation had the following items during its 2012 taxyear:

Net income from operations . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . $150,000

Dividends received (from less than 20% owned investees). . . . .. . . . . .      10,000

Charitable contributions . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . .    30,000

Net operating loss carryover from 2011 . . . . . . . . . . . . .. . . . . . . . . . . . .     30,000

Long-term capital gains. . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . ..       8,000

Long-term capital losses . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . .     6,000

Short-term capital gains . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . ..       3,000

Capital loss carryover from 2011 . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . .     9,000

Tax Credit…………………………………………………………………    4,500

6.      Compute JKEBCorporation’s 2012 taxable income and income tax liability beforetax credits.

7.      What are thenature and amount of any carryovers to 2013?

8.      What is thetaxable amount due after using the tax credit?