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(Solution) - James Bowen owns 100 of Bowen Corporation stock Bowen is

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James Bowen owns 100% of Bowen Corporation stock. Bowen is a calendar year, accrual method taxpayer. During the current year, Bowen made three charitable contributions:

Bowen purchased the Bates stock three years ago for $30,000. Bowen holds a 28% interest, which it accounts for under GAAP using the equity method of accounting. The current carrying value for the Bates stock for book purposes is $47,300. Bowen will pay the pledge to the Girl Scouts by check on March 3 of next year. Bowen?s taxable income for the current year before the charitable contributions deduction, dividends-received deduction, NOL deduction, and U.S. production activities deduction is $600,000. Your tax manager has asked you to prepare a memorandum explaining how these transactions are to be treated for tax purposes and for accounting purposes. Your manager has suggested that, at a minimum, you should consult the following resources:
? IRC Sec. 170
? Accounting Standards Codification (ASC) 720


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This question was answered on: Jul 11, 2017

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