Noelle, the owner of all of the shares of ClockCo, an S corporation, transfers her stock to Grayson on April1. ClockCo reports a $75,000 NOL for the entire tax year, but only $11, 250 of the loss occurs duringJanuary-MarchAssume 365 days in a year. Round per day computations to five decimal places. Round final answers tothe nearest dollar.Without a short - year election, how much of the loss is allocated to Noelle and how much is allocated toGrayson?Noelle's loss allocation: $fill in the blank 1(wrong answer 56,507)Grayson's loss allocation: Sfill in the blank 2(wrong answer 18, 493)If the corporation makes the short-year election, how much of the loss is allocated to Grayson?Sfill in the blank 363,750 (correct answer)

Noelle's loss allocation= 75,000 * (91 / 365) = 75,000 * 0.24932= $18,699 Grayson's loss allocation=…

Answered: Noelle, the owner of all of the shares…

SWFT Corp Partner Estates Trusts

42nd Edition

ISBN:9780357161548

Author:Raabe

Publisher:Raabe

Chapter12: S Corporations

Section: Chapter Questions

Problem 18CE

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During the last five months of the year, Dwana opens a new Internet telecommunications business called Dwan-Com. Dwan-Com bills 50,000 of revenues, but receives only 40,000 cash. Dwan-Com incurs 3,000 of supply expenses, and 41,000 of labor costs. Dwan-Com pays for 2,200 of the supplies and 38,000 of the labor costs in the current year. a. What is Dwan-Coms taxable income if it elects the cash method of accounting? b. What is Dwan-Coms taxable income if it elects the accrual method of accounting? c. What method of accounting do you recommend that Dwan-Com elect?
Noelle, the owner of all of the shares of ClockCo, an S corporation, transfers her stock to Grayson on April 1. ClockCo reports a $90,000 NOL for the entire tax year, but only $13,500 of the loss occurs during January-March. Assume 365 days in a year. Round per day computations to five decimal places. Round final answers to the nearest dollar. Without a short-year election, how much of the loss is allocated to Noelle and how much is allocated to Grayson? Noelle's loss allocation: $ X Grayson's loss allocation: X If the corporation makes the short-year election, how much of the loss is allocated to Grayson? 76,500
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Gary receives $40,000 worth of Quantro, Inc., common stock from his late grandmother's estate. Early in the year, he receives a $100 cash dividend. Four months later, he received a 2% stock dividend. Near the end of the year, Gary sells the stock for $42,000. Due to these events only, how much must Gary include in his gross income for the year?
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None
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