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 Dividend income Interest income Allocated wages Unadjusted basis of qualified property 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 qualifie property (unadjusted basis) in both years. Year 2 $ 310,000 (85,000) (40,000) (50,000) (15,000) (20,000) (10,000) (15,000) (7,500) (9,000) 2,000 500 Year 1 $ 45,000 500 $44,500 $ Year 1 $ 175,000 (60,000) 2,500 1,000 $ 45,000 $ 134,500 Answer is complete but not entirely correct. Jack 25 * $ 11,125 $ Year 2 Year 1 $134,500 $ 45,000 $1,000 $ 500 44,500 $ 133,500 $ 25 * $ 33,375 $ Jill Year 2 $134,500 > $1,000 X $133,500 > 75 X 75 × $ 33,375 $ 100,125

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 Dividend income Interest income Allocated wages Unadjusted basis of qualified property 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 qualifie property (unadjusted basis) in both years. Year 2 $ 310,000 (85,000) (40,000) (50,000) (15,000) (20,000) (10,000) (15,000) (7,500) (9,000) 2,000 500 Year 1 $ 45,000 500 $44,500 $ Year 1 $ 175,000 (60,000) 2,500 1,000 $ 45,000 $ 134,500 Answer is complete but not entirely correct. Jack 25 * $ 11,125 $ Year 2 Year 1 $134,500 $ 45,000 $1,000 $ 500 44,500 $ 133,500 $ 25 * $ 33,375 $ Jill Year 2 $134,500 > $1,000 X $133,500 > 75 X 75 × $ 33,375 $ 100,125

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

Required information [The following information applies to the questions displayed below.] During the current year, Ron and Anne sold the following assets: (Use the dividends and capital gains tax rates and tax rate schedules.) Capital Asset L stock M stock. N stock 0 stock Antiques Rental home Market Value $ 53,800 31,800 33,800 29,800 10,800 303,800* Tax Basis $ 42,900 42,800 23,900 36,800 Gross tax liability 5,900 91,900 Holding Period > 1 year > 1 year 1 year > 1 year *$30,000 of the gain is 25 percent gain (from accumulated depreciation on the property). Ignore the Net Investment Income Tax. a. Given that Ron and Anne have taxable income of only $18,100 (all ordinary) before considering the tax effect of their asset sales, what is their gross tax liability for 2023 assuming they file a joint return?
! Required information [The following information applies to the questions displayed below.] The Taurin Partnership (a calendar-year-end entity) has the following assets as of December 31 of the current year: Cash Accounts receivable Inventory Totals Cash Accounts receivable Inventory Tax Basis On December 31, Taurin distributes $15,240 of cash, $10,160 (FMV) of accounts receivable, and $40,420 (FMV) of inventory to Emma (a one-third partner) in termination of her partnership interest. Emma's basis in her partnership interest immediately prior to the distribution is $40,530. $ b. What is Emma's basis in the distributed assets? Note: Round your intermediate and final answers to the nearest whole dollar amount. Basis $ 45,720 15,240 81,900 $ 142,860 FMV $ 45,720 30,480 121,260 $ 197,460 15,240
Required information [The following information applies to the questions displayed below.] During the current year, Ron and Anne sold the following assets: (Use the dividends and capital gains tax rates and tax rate schedules.) Capital Asset L stock N stock N stock O stock Antiques Rental home Market Value $ 50, 800 28,800 Tax Basis Holding Period $ 41,400 > 1 year 39,800 22, 400 > 1 year 1 year 90, 400 > 1 year 30, 800 *$30,000 of the gain is 25 percent gain (from accumulated depreciation on the property). Ignore the Net Investment Income Tax. b. Given that Ron and Anne have taxable income of $400,800 (all ordinary) before considering the tax effect of their asset sales, what is their gross tax liability for 2023 assuming they file a joint return? Gross tax liability
Required Information [The following information applies to the questions displayed below.] Julio and Milania are owners of Falcons Corporation, an S corporation. Each owns 50 percent of Falcons Corporation. In year 1, Julio and Milania each received distributions of $12,000 from Falcons Corporation. Sales revenue Cost of goods sold Falcons Corporation (an S Corporation) Income Statement December 31, Year 1 and Year 2 Salary to owners Julio and Milania Employee wages Depreciation expense Section 179 expense Interest income (related to business income) Municipal bond income Government fines Overall net income Distributions Ordinary Income Amount Year 1 $ 335,000 (42,000) (40,000) (30,000) (20,000) (30,000) 12,000 1,808 Allocated to Julio 0 $ 186,800 $ 24,000 a. What amount of ordinary income and separately stated items are allocated to them for year 1 based on the information above? Assume that Falcons Corporation has $240,000 of qualified property (unadjusted basis). Year 2 $ 465,000…
Maria and Javier are the equal partners in MarJa, a partnership that is a qualified trade or business. In the current year, Marja had $328,200 of ordinary income after reporting $393,840 in guaranteed payments to Maria and Javier for their services to MarJa ($196,920 each). a. What is Maria's and Javier's qualified business income? b. What is Maria's and Javier's qualified business income if MarJa had $459,480 of ordinary income after reporting $196,920 in guaranteed payments to Maria and Javier ($98,460 each)?
Problem Mr. Renato and Mr. Walter, both married and are certified public accountants, formed general professional partnership during the current taxable year to render consultancy services to the public. The partners share profits and losses equally. The result of the partnership's operation showed the following data: Gross receipt from clients Costs of services P 1,000,000 300,000 Business expenses 240,000 Additional information provided: a. Mr. Renato, married with three qualified dependent children, has other income derived from business as follows: P 400,000 120,000 80,000 Gross sales Costs of expenses Operating taxes b. Travelling expenses incurred by the partners related to GPP's operation, which were neither claimed by the GPP as deduction income nor liquidated by the partnership: 15,000 10,000 Mr. Renato Mr. Walter c. Mr. Walter, married with five qualified dependents, received compensation income of P 250,000 as part -time college professor. Required: Determine the net taxable…
QUESTION 4 Sheldon and Amy own a plumbing business as a sole proprietorship. The file a joint return and are cash basis, calendar-year taxpayers. For the year, they had the following information: Ordinary income from sole proprietorship $300,000 Taxable income $405,000 Modified taxable income $375.000 W-2 wages paid to employees $70,000 Qualified property basis SE tax deduction SE insurance deduction $50,000 $23.968 $20,000 What is their QBI deduction? O $13.548 O $35.000 O $37,658 O $51,206
Kk.14.
Required information Skip to question [The following information applies to the questions displayed below.] Sandra would like to organize LAB (a legal corporation) as either an S corporation or a C corporation for tax purposes. In either form, the entity is expected to generate an 8 percent annual before-tax return on a $500,000 investment. Sandra's marginal income tax rate is 37 percent and her tax rate on qualified dividends and net capital gains is 20 percent. LAB's income is not qualified business income (QBI), so Sandra is not allowed to claim the QBI deduction. Assume that LAB will distribute all of its earnings after entity-level taxes every year. Ignore the additional Medicare tax and the net investment income tax when computing your answers. Note: Round your intermediate computations to the nearest whole dollar amount. b. What is the overall tax rate on LAB's income in the first year if LAB is organized as an S corporation or as a C corporation? Note: Round your…
Vikarmbhai
The Taurin Partnership (a calendar-year-end entity) has the following assets as of December 31 of the current year: Tax Basis FMV Cash $ 48,360 $ 48,360 Accounts receivable 16,120 32,240 Inventory 85,200 125,880 Totals $ 149,680 $ 206,480 On December 31, Taurin distributes $16,120 of cash, $10,747 (FMV) of accounts receivable, and $41,960 (FMV) of inventory to Emma (a one-third partner) in termination of her partnership interest. Emma's basis in her partnership interest immediately prior to the distribution is $42,473. c1. If Emma's basis before the distribution was $58,523 rather than $42,473, what is Emma's recognized gain or loss? c2. What is her basis in the distributed assets?