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. Domestic production activities deduction.
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.
c
RATIONALE: The other items are subtractions on Schedule M-1.
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