P аnd S аre dоmestic cоrpоrаtions. P owns 100% of S. P also owns 100% of F, a foreign corporation. P, S, and F are engaged in a unitary business. On a separate company basis, P has $300,000 of income, S has $100,000 of income, and F has $200,000 of income. No adjustments are required for intercompany transactions. P has nexus in State X, but S and F do not. State X uses a sales-only formula. Here are data regarding the sales of P, S, and F: P S F Sales in State X $1,500,000 $0 $0 Sales everywhere $2,500,000 $1,500,000 $1,000,000 State X requires combined unitary reporting and allows a taxpayer member the option of computing taxable income using either a water’s-edge combination or a worldwide combination. How much higher is P’s taxable income if the income and factors of F are included in the combined unitary report?
Acme Cоrpоrаtiоn hаs nexus only in Stаte X, which defines corporate taxable income as the amount on line 28 of federal Form 1120, with addition modifications for state income taxes and municipal interest, and subtraction modifications for federal interest income and dividends received from a 50%-or-more-owned corporation. Acme reports $200,000 of income on line 28 of federal Form 1120. The federal return includes $10,000 of federal interest income, $40,000 of dividends from a 30%-owned corporation, and a $15,000 state income tax deduction. Acme also has $8,000 of municipal interest, which is excluded from federal taxable income. What is Acme’s State X taxable income?