Need help with this general accounting question Desert Corporation, an S Corporation, had accumulatedearnings and profits of $120,000 at the beginning of 2020.Mark and Linda each own 50% of the stock and have abasis in their stock of $60,000 on January 1, 2020. Desertdoes not make any distributions during 2020 but had$240,000 of ordinary income. In 2021, ordinary incomewas $120,000, and distributions were $120,000. What isMark's basis at January 1, 2022?A) $120,000B) $180,000C) $240,000D) $300,000

To calculate Mark's basis at January 1, 2022, we need to consider the following factors: Beginning…

Answered: Desert Corporation, an S Corporation,…

SWFT Essntl Tax Individ/Bus Entities 2020

23rd Edition

ISBN:9780357391266

Author:Nellen

Publisher:Nellen

Chapter13: Corporations: Earning & Profits And Distributions

Section: Chapter Questions

Problem 21P

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Suppose that at the beginning of 2021 Jamaal's basis in his S corporation stock is $1,000 and he has a $10,000 debt basis associated with a $10,000 loan he made to the S corporation. In 2021, Jamaal's share of S corporation income is $4,000, and he received a $7.000 distribution from the S corporation. How much total income does Jamaal report in 2021 from these transactions? Multiple Choice $0 $4,000 $6,000 $7,000 None of the choices are correct.
ABC Corp. had accumulated earnings and profits as of January 1, 2021 equal to $17,000. For the calendar year ending December 31, 2021 its current earnings and profits were equal to $10,000. On May 31, 2021, ABC Corp. distributed $32,500 to Smith its sole shareholder. On November 30, 2021, ABC Corp. distributed another $17,500 to Smith. Smith had purchased his ABC Corp, stock from Grey on September 15, 2015, paying $19,500 for his shares. a) What is the amount and character of the May 31, 2021 distribution received by Smith? b) What is the amount and character of the November 30, 2021 distribution received by Smith?
On January 1, 2020, Kinney, Inc., an S corporation, reports $11,200 of accumulated E & P and a balance of $28,000 in AAA. Kinney has two shareholders, Erin and Frank, each of whom owns 500 shares of Kinney's stock. Kinney's nonseparately stated ordinary income for the year is $14,000. Kinney distributes $16,800 to each shareholder on July 1, and it distributes another $8,400 to each shareholder on December 21. How are the shareholders taxed on the distributions? Ignore the 20% QBI deduction. Do not round intermediate computations. If required, round your final answers to the nearest dollar. Erin and Frank each report $ 0 x dividend income for the July 1 distribution and $ 0 X each for the December 21 distribution. Assuming that the shareholders have sufficient basis in their stock, both Erin and Frank each receive a tax-free ✓ 0 X distribution from AAA.
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Suppose that at the beginning of 2019 José's basis in his S corporation stock was $17,000 and José has directly loaned the S corporation $5,000. During 2019, the S corporation reported an $75,000 ordinary business loss and no separately stated items. How much of the ordinary loss is deductible by José if he owns 40 percent of the S corporation? Explain the rule and show computation.
Wineseller Corporation is owned by Mortimer Smith, its sole shareholder. Mortimer has a $20,000 basis in his Wineseller Corporation stock. Mortimer is in the 37% tax bracket. Wineseller Corporation is in the 21% tax bracket. Wineseller Corporation has the following balances as of December 31, 2021. Accumulated Earnings and Profits (AEP) ($600,000) Current Earnings and Profits $ 70,000 On December 31, 2021, Wineseller Corporation distributes $160,000 to Mortimer. What are the tax consequences to Mortimer from receiving this distribution from Wineseller Corporation?
XYZ Corporation (an S corporation) is owned by Jane and Rebecca, who are each 50 percent shareholders. At the beginning of the year, Jane's basis in her XYZ stock was $54,000. XYZ reported the following tax information for 2022. Description Amount Sales revenue $ 716,000 Cost of goods sold (214,000) Long-term capital gain 22,000 Dividend income 26,000 Tax-exempt interest 17,000 Salary to owners (134,000) Employee wages (64,000) Depreciation expenses (10,600) Miscellaneous expenses (13,500) Overall net income $ 344,900 What amount of ordinary business income is allocated to Jane?Hint: you might want to work on question b) first. Identify all separated items, then the remaining will be ordinary business income What is the amount and character of separately stated items allocated to Jane? What is Jane's basis in her XYZ Corporation stock at the end of the year? Please avoid answers in image format thank you
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You’re a 40% shareholder of ABC, Inc., an S corporation. ABC’s ordinary busi-ness income for 2019 was exactly $100,000. ABC distributed $20,000 to you in your capacity as a shareholder during 2019. On your 2019 Form 1040, you will report ___ of gross income from ABC. Why is that the correct amount plzzz ans asap.....
John Reardon purchased 100 shares of Tomco Corporation in December 2019 at a total cost of $1,762. He held the shares for 12 months and then sold them, netting $2,500. During the period he held the stock, the company paid him $3 per share in cash dividends. How much, if any, was the capital gain realized upon the sale of stock? Calculate John’s pretax HPR

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