Question

Caddo Corporation is owned by three engineers, all of whom are employed by the corporation. It primarily performs civil engineering activities with respect to construction projects. During the current year, Caddo Corporation earned $150,000 of taxable income. Caddo has not elected to be taxed under Subchapter S. What is Caddo’s current-year regular tax liability?

Answer 1

$31,500

Step-by-step explanation:

Since the Tax Cuts and Jobs Act of 2017 the corporate tax rate fell from 35% to a flat rate of 21% (current rate). Since we are not given any year, we can assume that this applies to 2018.

Caddo Corporation current tax liability = total taxable income x 21% = $150,000 x 21% = $31,500