For Purposes of Determining Current E&P, Which of the Following

question 95

Multiple Choice

For purposes of determining current E&P, which of the following items cannot be deducted in the year incurred?

• A)charitable contribution in excess of the 10% limitation
• B)capital losses in excess of capital gains
• C)life insurance premiums (in excess of the increase in cash surrender value for the policy)paid on the lives of key employees
• D)dividends-received deduction

---

Definitions:

Withdrawals

Money or assets taken out of a business by its owner(s) for personal use.

Owner's Equity

The ownership stake of shareholders or owners in a company's assets once all debts have been subtracted.

Income Statement

A financial statement that shows a company's revenues and expenses over a specific period of time, resulting in a net profit or loss.

Capital Account

An account on the balance sheet representing the original investment by the owners plus any retained earnings.