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)Premiums paid on key employee life insurance.
B)Proceeds of life insurance paid on death of key employee.
C)Charitable contributions carryover from previous year.
D)Tax-exempt interest.
E)None of the above.

Question

Quizplus · Accepted Answer

Premiums paid on key employee life insurance are not deductible for tax purposes and must be added back to book income on Schedule M-1 to reconcile to taxable income.

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