Connie recently provided legal services to the Winterhaven LLC and received a 5 percent interest in the LLC as compensation. Winterhaven currently has $47,000 of accounts payable and no other liabilities. The current fair market value of Winterhaven's capital is $170,000. (Leave no answer blank. Enter zero if applicable.) c. If Connie receives a 5 percent capital and profits interest, how much income must she report and what is her tax basis in the LLC interest? Income Tax basis

Connie recently provided legal services to the Winterhaven LLC and received a 5 percent interest in the LLC as compensation. Winterhaven currently has $47,000 of accounts payable and no other liabilities. The current fair market value of Winterhaven's capital is $170,000. (Leave no answer blank. Enter zero if applicable.) c. If Connie receives a 5 percent capital and profits interest, how much income must she report and what is her tax basis in the LLC interest? Income Tax basis

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Keiji Jones is the owner of a small retail business operated as a sole proprietorship. During 2022, his business recorded the following items of income and expense: Revenue from inventory sales Cost of goods sold Business license tax Rent on retail space. Supplies Wages paid to employees Payroll taxes Utilities Required: $ 147,000 33,500 2,400 42,000 15,000 22,000 1,700 3,600 a. Compute taxable income attributable to the sole proprietorship by completing Schedule C to be included in Keiji's 2022 Form 1040. b. Compute self-employment tax payable on the earnings of Keiji's sole proprietorship by completing a 2022 Schedule SE, Form 1040. c. Assume that Keiji's business is not a service business, and that it has $155,000 unadjusted basis in tangible depreciable property. Calculate Keiji's 2022 QBI deduction, before any overall taxable income limitation. Complete this question by entering your answers in the tabs below. Schedule C Schedule SE Part a Part b Part c Assume that Keiji's…
Sara is filing as head of household and has 2021 taxable income of $59,000, which includes $3,000 of net long-term capital gain. The net long-term capital gain is made up of $1,000 25% gain and $2,000 0%/15%/20% gain. What is the tax on her taxable income using the alternative tax method? Note: Use the tax rate schedule rather than the tax table. a.$7,276. b.$7,066. c.$0 d.$7,136.
Ms. Kona owns a 10 percent interest in Carlton LLC. This year, the LLC generated $66,400 ordinary income. Ms. Kona’s marginal tax rate is 32 percent, and she does not pay SE tax on her LLC income. Required: Compute the tax cost on Ms. Kona’s share of Carlton’s income assuming that she received a $29,000 cash distribution this year. Compute the tax cost on Ms. Kona’s share of Carlton’s income assuming that she received no cash distribution this year.
Problem 2. Scott Taxpayer is an Attorney who operates his own law firm. As a single-member LLC, Scott reports his firm operations as a sole proprietor. Scott has QBI from his law firm of $450,000, he reports paying W–2 wages of $140,000, and the unadjusted basis of property used in the LLC is $350,000. Scott is married and will file a joint tax return with his spouse. Their taxable income before the QBI deduction is $425,000, including $20,000 of capital gains. Determine the taxpayer’s QBI deduction for 2020
Eva received $60,000 in compensation payments from JAZZ Corp. during 2020. Eva incurred $5,000 in business expenses relating to her work for JAZZ Corp. JAZZ did not reimburse Eva for any of these expenses. Eva is single and she deducts a standard deduction of $12,400. Based on these facts, answer the following questions: Use Tax Rate Schedule for reference. (Leave no answer blank. Enter zero if applicable.) a. Assume that Eva is considered to be an employee. What amount of FICA taxes is she required to pay for the year?
In the current year, Pearl Corporation has $30,000 of current and accumulated E&P. On June 3, Pearl Corporation distributes a parcel of land (a capital asset) worth $120,000 to Betty, a shareholder. The land has a $70,000 adjusted basis to Pearl Corporation and is subject to a $16,000 mortgage, which Betty assumes. Betty’s basis in her Pearl Corporation stock is $10,000 (Ignore any tax effects on E&P). What is Betty's holding period in the land?
9. Phoebe's filing status is single. She owns and operates a hardware store. For the current year, the store has business revenues that total $100,000 and business expenses that total $120,000. Phoebe has qualified dividend income of $10,000 and corporate bond interest income of $35,000, but no other items that would affect her adjusted gross income (AGI). Her itemized deductions total $9,000. How much is Phoebe's qualified business income (QBI) deduction? a) $560 b) $4,560 c) $20,000 d) $-0- e) $2,800
Stephanie began her consulting business this year, and on April 1 Stephanie received a $9,000 payment for full payment on a three-year service contract (under the contract, Stephanie is obligated to provide advisory services for the next three years). Stephanie has elected to use the accrual method of accounting for her business. (Leave no answers blank. Enter zero if applicable.) b. What is the minimum amount of income Stephanie will recognize next year for tax purposes? Recognized income
Question. Connie recently provided legal services to the Winterhaven LLC and received a 5 percent interest in the LLC as compensation. Winterhaven currently has $43,000 of accounts payable and no other debt. The current fair market value of Winterhaven's capital is $270,000. (Leave no answer blank. Enter zero if applicable.) a. If Connie receives a 5 percent capital interest only, how much income must she report and what is her tax basis in the LLC interest? Income Tax Basis b. If Connie receives a 5 percent profits interest only, how much income must she report and what is her tax basis in the LLC interest? Income Tax Basis c. If Connie receives a 5 percent capital and profits interest, how much income must she report and what is her tax basis in the LLC interest? Income Tax Basis
who has AGI of $80,000 before considering rental activities, is activein three separate real estate rental activities and is in the 22% tax bracket.She has $12,000 of losses from Activity A, $18,000 of losses from Activity B, and income of $10,000 from Activity C. She also has $2,100 of tax credits from Activity A. Calculate the deductions and credits that she is allowed and the suspended losses and credits
Connie recently provided legal services to the Winterhaven LLC and received a 20 percent interest in the LLC as compensation. Winterhaven currently has $50,000 of accounts payable and no other debt. The current fair market value of Winterhaven’s capital is $200,000. If Connie receives a 20 percent profits interest only, how much income must she report?
In 2023, Sheryl is claimed as a dependent on her parents' tax return. Her parents report taxable income of $600,000 (married filing jointly). Sheryl did not provide more than half her own support. What is Sheryl's tax liability for the year in each of the following alternative circumstances? Use Tax Rate Schedule, Dividends and Capital Gains Tax Rates for reference. Note: Leave no answer blank. Enter zero if applicable. Problem 8-51 Part c (Static) c. She received $7,000 of interest income from corporate bonds she received several years ago. This is her only source of income. She is 20 years old at year-end and is a full-time student. Tax liability