Financial Account A review of Bearing's Year 2 records disclosed the following taxinformation:Wages $20,000; Taxable interest and qualifying dividends 4,000;Schedule C trucking business net income 32,000; Rental (loss) fromresidential property (35,000); Limited partnership (loss) (5,000); Bearingactively participated in the rental property and was a limited partner in thepartnership. The bearing had sufficient amounts at risk for the rentalproperty and the partnership.Required:What is Bearing's Year 2 adjusted gross income?

To determine Bearing's Adjusted Gross Income (AGI), we calculate taxable income by considering all…

Answered: A review of Bearing's Year 2 records…

SWFT Comprehensive Vol 2020

43rd Edition

ISBN:9780357391723

Author:Maloney

Publisher:Maloney

Chapter21: Partnerships

Section: Chapter Questions

Problem 3BCRQ

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Required: 1. Williamson, LLC, paid insurance premiums of $6,720 on December 1, 20X1. These premiums covered a two-year period beginning on that date. What amount, from this payment, should the corporation show as insurance expense for the year 20X1? 2. Taylor Moore buys and sells real estate. On December 31, 20X1, her inventory of property included a tract of undeveloped land for which she had paid $945,000. The fair market value of the land was $1,045,000 at that date. How much income should Moore report for 20X1 in connection with this land? 3. Madison Building Company signed a contract with a customer on November 1, 20X1. The contract called for construction of a building to begin by December 31, 20X1, and to be completed by December 31, 20X2. The contract price was $9.9 million. Madison estimated that the building would cost $6.9 million. On November 15, 20X1, the customer was required to make an advance payment of $1,045,000. No work was done on the project until January 20X2. How…
1. George operates a business that generated revenues of $50 million and allocable taxable income of $560,000. Included in the computation of allocable taxable income were $900,000 of business interest expense, $20,000 of business interest income, and $180,000 of depreciation. What is the maximum business interest deduction that George will be eligible to claim this year if the business does not qualify under the gross income test? a) $168,000 b) $560,000 c) $612,000 d) $452,000 2. Mike started a calendar-year business on September 1stSeptember 1st of this year by paying 12 months of rent on his shop at $550 per month. What is the maximum amount of rent that Mike can deduct this year under each type of accounting method? a) $6,600 under the cash method and $6,600 under the accrual method b) $6,600 under the cash method and $2,200 under the accrual method c) $2,200 under the cash method and $2,200 under the accrual method d) $2,200 under the cash method and zero under the…
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Uramilaben
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Jack and Jill are owners of UpAHill, an S Corporation. They own 25 and 75 percent, respectively. UpAHill Corporation (an S Corporation) Income Statement December 31, Year 1 and Year 2 Sales revenue Cost of goods sold Salary to owners Jack and Jill Employee wages Depreciation expense Miscellaneous expenses. Interest income (related to business) Qualified dividend income Overall net income Ordinary income Allocated wages Unadjusted basis of qualified property Year 1 $ 175,000 (60,000) (40,000) a. What amount of ordinary income and separately stated items are allocated to them for years 1 and 2 based on the information above? Assume that UpAHill Corporation has $100,000 of qualified property (unadjusted basis) in both years. Year 1 (15,000) (10,000) (7,500) 2,000 500 $ 45,000 Year 2 $ 310,000 (85,000) (50,000) (20,000) (15,000) (9,000) 2,500 1,000 $ 134,500 Jack Year 2 Year 1 Jill Year 2 b. Complete UpAHill's Form 1120-S, Schedule K, for year 1. Complete Jill's Form 1120-S Schedule K for…
A

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