Assume that the Board of Directors has chosen to assign $523,000 of the cooperative’s Net Income to the Unallocated Reserve (rather than the actual value of $132,170): Who is liable for the federal and state income taxes on the $523,000? The cooperative’s patrons The cooperative Both the cooperative and the cooperative’s patrons If the marginal tax rate for this assignment is 21%, what is the tax liability on the Unallocated Reserve? How much of the cooperative’s Net Income can be allocated to patrons?

Assume that the Board of Directors has chosen to assign $523,000 of the cooperative’s Net Income to the Unallocated Reserve (rather than the actual value of $132,170): Who is liable for the federal and state income taxes on the $523,000? The cooperative’s patrons The cooperative Both the cooperative and the cooperative’s patrons If the marginal tax rate for this assignment is 21%, what is the tax liability on the Unallocated Reserve? How much of the cooperative’s Net Income can be allocated to patrons?

SWFT Comprehensive Volume 2019

42nd Edition

ISBN:9780357233306

Author:Maloney

Publisher:Maloney

Chapter24: Multistate Corporate Taxation

Section: Chapter Questions

Problem 27P

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