Posted by Q on Wednesday, October 17, 2012 at 8:55pm.
For a class C corporation in Louisiana, the amount of state income tax S is deductible on the federal return and the amount of federal income tax F is deductible on the state return. With $200,000 taxable income and a 30% federal tax rate, the federal tax is 0.30(200,000  S). If the state tax rate is 6% then the state tax satisfies S = 0.06(200,000  0.30(200,000  S)). Find the state tax S and the federal tax F.

Math  Jennifer, Wednesday, October 17, 2012 at 9:16pm
S = 0.06(200,000  0.30(200,000  S))
Start multiplying
S = 0.06(200,000  60000 + 0.3*S)
S = 12000  3600 + 0.018*S
0.982*S = 8400
S = 8554
F = 0.3(2000008554)
Solve for F
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