timed out BattleActs100

Tax-Basis Income (harder version)

myID_+ priorDate_+ record_+ WET_+ fadeFactor_

Calculate the income tax for year CY . (Modeled on 2017.Fall #21)

  current score:
0.000

final tax liability
    RIT
    AMIT
corporate tax rate 35%
ownership of dividend-paying corporation 50%
CY CY-1
written premium WP
unearned premium UEP
paid loss PL
loss reserves (undiscounted) LU
loss reserves (discounted) LD
interest on tax-exempt municipal bonds B
dividend income D

Notation

TBI:
Tax-Basis Income (same as RTI)
RTI:
Regular Taxable Income (same as TBI)
RIT:
Regular Income Tax
AMTI:
Alternative Minimum Taxable Income
AMIT:
Alternative Minimum Income Tax
InvInc:
taxable portion of investment income

Formulas

final tax liability
= MAX ( RIT , AMIT )

   RIT
= RTI x 35%    =   TBI x 35%    (RTI & TBI or Tax-Basis Income are the same things.)

TBI (RTI)
=    TBEP    +    InvInc    – TBIL

TBEP
=    EP    +    20% x chg(UEP)
=    WP    -    80% x chg(UEP)

TBIL
=    PL    +    chg(LD)

InvInc (different options depending on information given)

  → if EP is given, assume it's invested and apply compound interest (it's fully taxable)
  → if tax-exempt municipal bonds are given, add 15% of interest income (it isn't fully tax-exempt)
  → if dividend income is given, the amount included in taxable income depends on the ownership %

   AMIT
= AMTI x 20%

AMTI
=    TBI    +    75% x (non-taxable InvInc)

Solution:
final tax liability
    RIT
    AMIT
TBI (RTI)
  TBEP
  InvInc (taxable)
  TBIL
AMTI
  InvInc (non-taxable)