Don Juan, a single taxpayer, is the sole owner of DJ's Incorporated, $600,000 business loss, all of which is allocable to Don Juan as the the basis, at-risk, or passive loss rules, and that Don Juan has no ot
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- Damarcus is a 50 percent owner of Hoop (a business entity). In the current year, Hoop reported a $100,000 business loss. Answer the following questions associated with each of the following alternative scenarios. (Leave no answer blank. Enter zero if applicable.) e. Hoop is organized as an LLC taxed as a partnership. Fifty percent of Hoop’s loss is allocated to Damarcus. Damarcus does not work for Hoop at all (he is a passive investor in Hoop). Damarcus has a $20,000 basis in his Hoop ownership interest and he also has a $20,000 at-risk amount in his investment in Hoop. Damarcus reports $10,000 of income from a business activity in which he is a passive investor. How much of the $50,000 loss allocated to him by Hoop is Damarcus allowed to deduct this year? Allowable deduction of lossFrances transfers her business assets (basis of $260,000; FMV of $220,000) to her newly formed corporation, Corporation X, of which she is the majority shareholder. Frances receives 11,000 shares of the new corporation's stock, worth $220,000. Since this is a tax free transaction, she can recognize a deductible loss of $40,000. True False If a shareholder receives boot upon incorporation, the recognized gain is the lesser of the realized gain or the boot received. True FalseBruno, an individual, is the sole shareholder of Green Corporation. On January 1, 2019, Bruno decided to liquidate Green Corporation. At the date of liquidation, Green Corporation had assets with a FMV of $2,500,000 and a basis of $1,800,000. Green Corporation’s earnings and profits at the date of liquidation were $2,000,000. Bruno’s basis in Green Corporation stock is $900,000. 1. What tax impact does the liquidation have on Green Corporation? 2. What tax impact does the liquidation have on Bruno (Assume tax rate of 23.8%) 3. How would your answer change if Bruno was a C-Corporation instead of an individual?
- Mark, single, is the sole shareholder of Mark's Tool and Dye, Inc., a tool and dye manufacturing company operating as an S corporation. Mark reports qualified business income of $121,500 and he has no employees. He also has qualified dividend income of $4,400. He has no itemized deductions and claims the standard deduction of $13,850 on his 2023 Form 1040. What is Mark's qualified business income deduction? Mark's qualified business income deduction tA $ 25,180Aram's taxable income before considering capital gains and losses is $82,000. Determine Aram's taxable income and how much of the income will be taxed at ordinary rates in each of the following alternative scenarios (assume Aram files as a single taxpayer) Required: a. Aram sold a capital asset that he owned for more than one year for a $5,440 gain, a capital asset that he owned for more than one year for a $720 loss, a capital asset that he owned for six months for a $1,640 gain, and a capital asset he owned for two months for a $1,120 loss. b. Aram sold a capital asset that he owned for more than one year for a $2.220 gain, a capital asset that he owned for more than one year for a $2,940 loss, a capital asset that he owned for six months for a $420 gain, and a capital asset he owned for two months for a $2.340 loss c. Aram sold a capital asset that he owned for more than one year for a $2.720 loss, a capital asset that he owned for six months for a $4,640 gain, and a capital asset…Alabama Corporation, an S corporation, liquidates this year by distributing a parcel of land to its sole shareholder, Mark Ingram. The fair market value of the parcel is $58,500, and its tax basis is $36,000. Mark's basis in his stock is $29,500. d. Assume the fair market value of the land is $25,000 rather than $58,500. How much gain must Mark recognize (if any) as a result of the distribution, and what is his basis in the land? Land Basis
- Aram's taxable income before considering capital gains and losses is $71,000. Determine Aram's taxable income and how much of the income will be taxed at ordinary rates in each of the following alternative scenarios (assume Aram files as a single taxpayer). Required: Aram sold a capital asset that he owned for more than one year for a $5,220 gain, a capital asset that he owned for more than one year for a $610 loss, a capital asset that he owned for six months for a $1,420 gain, and a capital asset he owned for two months for a $1,010 loss. Aram sold a capital asset that he owned for more than one year for a $2,110 gain, a capital asset that he owned for more than one year for a $2,720 loss, a capital asset that he owned for six months for a $310 gain, and a capital asset he owned for two months for a $2,120 loss. Aram sold a capital asset that he owned for more than one year for a $2,610 loss, a capital asset that he owned for six months for a $4,420 gain, and a capital asset he…2Tim, a single taxpayer, operates a business as a single-member LLC. In 2023, his LLC reports business income of $367,500 and business deductions of $643, 125, resulting in a loss of $ 275,625. What are the implications of this business loss? a. Tim has an excess business loss of $fill in the blank 1 44,000. b. Can this business loss be used to offset other income that Tim reports? If so, how much? If not, what happens to the loss? Tim may use Sfill in the blank 2 289,000 of the $333,000 LLC business loss, to offset nonbusiness income. The excess business loss is treated as part of Tim's NOL carryforward.
- Damarcus is a 50 percent owner of Hoop (a business entity). In the current year, Hoop reported a $100,000 business loss. Answer the following questions associated with each of the following alternative scenarios. (Leave no answer blank. Enter zero if applicable.) c. Hoop is organized as an LLC taxed as a partnership. Fifty percent of Hoop’s loss is allocated to Damarcus. Damarcus does not work for Hoop at all (he is a passive investor in Hoop). Damarcus has a $20,000 basis in his Hoop ownership interest and he also has a $20,000 at-risk amount in his investment in Hoop. Damarcus does not report income or loss from any other business activity investments. How much of the $50,000 loss allocated to him by Hoop is Damarcus allowed to deduct this year? Allowable Deduction Loss?Jose is married filing a joint return. In 2022, he earned $160,000 of profit from his sole proprietorship, which operates a service business. The business paid no W-2 wages in 2022 and owns no tangible business property. Compute Jose’s allowable QBI deduction if his joint return includes his spouse's salary and reflects taxable income of $300,000 before the deduction. Hint: the correct answer should be $29,749Monica contributes appreciated property (.e, Adjusted Basis of $65,000 and Fair Market Value of $100,000) to her business entity in a transaction which qualifies for nonrecognition of galin. Monica's ownership interest in the business entity is sbety percent (60%). The business entity later sells the appreciated property for $110,000. The property is not deprecdable. If the entity is a Regular (9 Corporation, Monica's Gross Income is increased from the sale of the property by the Corporation by $41,000, O True False QUESTION 5 Actual Dividends pald to shareholders of a Regular (C) Corporation result in Double Taxation. Likewise, Constructive Dividends (eg. Personal use of corporate property by a shareholder, etc.) result in Double Taxation. O False O True