Hall Inc. has computed federal taxable income before deduction for state taxes of
$3 million. It incurred state income tax in six states of $750,000 and paid $60,000 in
state franchise taxes.
a. Calculate Hall's federal taxable income and tax liability.
b. Calculate Hall's total federal and state tax burden as a percentage of pretax
I am assuming a 40% federal tax rate. The state income taxes and franchise taxes are deductible for federal purposes.
a. The federal taxable income is the $3 million less ...
Calculation of taxable income, tax liability, and tax burden (percentage)