30. Mauve Corporation began operations as a farm supplies business and used a fiscal year ending September 30. The company gradually went out of the farm supplies business and into the mail-order Christmas gifts business. The company has received permission from the IRS to change to a fiscal year ending January 31, effective for the year ending January 31, 2005. For the short period October 1, 2004, through January 31, 2005, Mauve earned $25,000.
Calculate Mauve's tax liability for the short period October 1, 2004, through January 31, 2005.
This change in fiscal year leads to short tax year, which is a tax year of less than 12 months.
If the IRS approves a change in company's tax year, the company must figure the tax and file tax return for the ...
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