Schedule M-1 of Form 1120 Is Used to Reconcile Financial

question 105

Multiple Choice

Schedule M-1 of Form 1120 is used to reconcile financial net income with taxable income reported on the corporation's income tax return as follows: net income per books + additions - subtractions = taxable income. Which of the following items is an addition on Schedule M-1?

• A) Tax depreciation in excess of book depreciation.
• B) Proceeds of life insurance paid on death of key employee.
• C) Excess of capital losses over capital gains.
• D) Tax-exempt interest.
• E) None of the above.

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Definitions:

Suicide

The act of intentionally causing one's own death.

Depressed

A state characterized by feelings of severe despondency and dejection, often accompanied by a lack of energy and difficulty in maintaining concentration or interest in life.

Attention

The cognitive process of selectively concentrating on one aspect of the environment while ignoring other things.

Promise

A declaration or assurance that one will do something or that a particular thing will happen.