Answered: During the year, Miles Nutt, the sole… | bartleby

SWFT Essntl Tax Individ/Bus Entities 2020

SWFT Essntl Tax Individ/Bus Entities 2020

23rd Edition

ISBN:9780357391266

Author:Nellen

Publisher:Nellen

Chapter15: S Corporations

Section: Chapter Questions

Problem 2CE

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Question

During the year, Miles Nutt, the sole shareholder of a calendar year S corporation, received a
distribution of $16,000. At the end of last year, his stock basis was $4,000. The corporation
earned $11,000 ordinary income during the year. It has no accumulated E & P. Which
statement is correct?
a. Nutt recognizes a $1,000 LTCG.
b. Nutt's stock basis is $2,000.
c. Nutt's ordinary income is $15,000.
d. Nutt's tax-free return of capital is $11,000.'

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Dion, an S shareholder, owned 20% of MeadowBrook's stock for 292 days and 25% for the remaining 73 days in the year. Using the required per-day allocation method, compute Dion's share of the following S corporation items. Assume 365 days in a year. Schedule K Totals Dion's Schedule K–1 Totals Ordinary income $176,000 $fill in the blank 1 Tax-exempt interest 1,760 $fill in the blank 2 Charitable contributions 8,800 $fill in the blank 3
Assume the following year 2 income statement for Johnstone Corporation, which was a C corporation in year 1 and elected to be taxed as an S corporation beginning in year 2. Johnstone's earnings and profits at the end of year 1 were $11,560. Marcus is Johnstone's sole shareholder, and he has a stock basis of $46,000 at the end of year 1. Johnstone Corporation Income Statement December 31, Year 2 Year 2 (S Corporation) $ 174,000 ( 41,000) (66,000) (56,500) (10,000) ( 4,600) 12,540 $ 8,440 Sales revenue Cost of goods sold Salary to owners Employee wages Depreciation expense Miscellaneous expenses Interest income Overall net income What is Johnstone's accumulated adjustments account at the end of year 2, and what amount of dividend income does Marcus recognize on the year 2 distribution in each of the following alternative scenarios? (Leave no answer blank. Enter zero if applicable.) c. Johnstone distributed $17,200 to Marcus in year 2. Accumulated adjustments account Dividend income
Assume the following year 2 income statement for Johnstone Corporation, which was a C corporation in year 1 and elected to be taxed as an S corporation beginning in year 2. Johnstone's earnings and profits at the end of year 1 were $11,560. Marcus is Johnstone's sole shareholder, and he has a stock basis of $46,000 at the end of year 1. Johnstone Corporation Income Statement December 31, Year 2 Year 2 (S Corporation) $ 174,000 ( 41,000) ( 66,000) ( 56,500) (10,000) (4,600) 12,540 Sales r evenue Cost of goods sold Salary to owners Employee wages Depreciation expense Miscellaneous expenses Interest income Overall net income $ 8,440 What is Johnstone's accumulated adjustments account at the end of year 2, and what amount of dividend income does Marcus recognize on the year 2 distribution in each of the following alternative scenarios? (Leave no answer blank. Enter zero if applicable.) a. Johnstone distributed $7,200 to Marcus in year 2. Accumulated adjustments account Dividend income
Assume the following year 2 income statement for Johnstone Corporation, which was a C corporation in year 1 and elected to be taxed as an S corporation beginning in year 2. Johnstone's earnings and profits at the end of year 1 were $11,560. Marcus is Johnstone's sole shareholder, and he has a stock basis of $46,000 at the end of year 1. Johnstone Corporation Income Statement December 31, Year 2 Year 2 (S Corporation) $ 174,000 ( 41,000) ( 66,000) (56,500) (10,000) ( 4,600) 12,540 $ 8,440 Sales revenue Cost of goods sold Salary to owners Employee wages Depreciation expense Miscellaneous expenses Interest income Overall net income What is Johnstone's accumulated adjustments account at the end of year 2, and what amount of dividend income does Marcus recognize on the year 2 distribution in each of the following alternative scenarios? (Leave no answer blank. Enter zero if applicable.) d. Johnstone distributed $27,200 to Marcus in year 2. Accumulated adjustments account Dividend income
Assume the following year 2 income statement for Johnstone Corporation, which was a C corporation in year 1 and elected to be taxed as an S corporation beginning in year 2. Johnstone's earnings and profits at the end of year 1 were $11,560. Marcus is Johnstone's sole shareholder, and he has a stock basis of $46,000 at the end of year 1. Johnstone Corporation Income Statement December 31, Year 2 Year 2 (S Corporation) $ 174,000 ( 41,000) ( 66,000) ( 56,500) (10,000) ( 4,600) 12,540 $ 8,440 Sales r evenue Cost of goods sold Salary to owners Employee wages Depreciation expense Miscellaneous expenses Interest income Overall net income What is Johnstone's accumulated adjustments account at the end of year 2, and what amount of dividend income does Marcus recognize on the year 2 distribution in each of the following alternative scenarios? (Leave no answer blank. Enter zero if applicable.) b. Johnstone distributed $11,200 to Marcus in year 2. Accumulated adjustments account $ Dividend income
Marathon Inc. (a C corporation) reported $1,650,000 of taxable income in the current year. During the year, it distributed $165,000 as dividends to its shareholders as follows: (Leave no answer blank. Enter zero if applicable.) $8,250 to Guy, a 5 percent individual shareholder. $24,750 to Little Rock Corp., a 15 percent shareholder (C corporation). $132,000 to other shareholders. a. How much of the dividend payment did Marathon deduct in determining its taxable income? b. Assuming Guy's marginal ordinary tax rate is 37 percent, how much tax will he pay on the $8,250 dividend he recieved from Marathon Inc. c. What amount of tax will Little Rock Corp.pay on the $24,750 dividend it recieved from Marathon Inc. (50 percent dividends recieved deduction)?
a) Calculate the S corporation's ordinary (non-separately stated) income and indicate which items must be separately stated b) If at the beginning of the year, Archer had a basis of 20,000 compute Archer’s basis at the end of the year. c) Assume that Voyager reported a loss of $70,000 instead (and no separately stated items or distributions). If Janeway had a basis of 10,000 in her stock at the beginning of the year, what is the amount of loss she can report on her return?
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