Problem 8-42 (LO 8-4) Dominique and Terrell are joint owners of a bookstore. The business operates as an S corporation. Dominique owns 65%, and Terrell owns 35%. The business has the following results in the current year: Revenue Business expenses Charitable contributions Short-term capital losses Long-term capital gains. Required: How do Dominique and Terrell report these items for tax purposes? Revenues Expenses Ordinary income Charitable contributions $ 2,100,000 1,470,000 46,500 3,840 6,400 S/T capital losses LIT capital gains Total 0 Dominique (65%) Terrell (35%) Reporting Schedule

Problem 8-42 (LO 8-4) Dominique and Terrell are joint owners of a bookstore. The business operates as an S corporation. Dominique owns 65%, and Terrell owns 35%. The business has the following results in the current year: Revenue Business expenses Charitable contributions Short-term capital losses Long-term capital gains. Required: How do Dominique and Terrell report these items for tax purposes? Revenues Expenses Ordinary income Charitable contributions $ 2,100,000 1,470,000 46,500 3,840 6,400 S/T capital losses LIT capital gains Total 0 Dominique (65%) Terrell (35%) Reporting Schedule

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Robin, a C corporation, had revenues of $417,500 and operating expenses of $75,000. Robin also received a $20,000 dividend from a domestic corporation and is entitled to a $10,000 dividend-received deduction. Robin donated $50,000 to a qualified charitable organization in the current year. What is Robin's contribution deduction A. $34,250 B. $35,250 C. $36,250 D. $50,000 17. A nonliquidating distribution from a C corporation may be treated by the shareholder as each of the following except A. Ordinary income. B. Nontaxable return of capital. C. Capital gain. D. Capital loss 23.A C corporation had accumulated negative earnings and profits (E&P) of $15,000 at the beginning of Year 4. Year 4's current E&P is $10,000. On the last day of Year 4, the corporation made a $12,500 cash distribution to its shareholders. Assuming the shareholders have sufficient basis, what amount of the distribution is reported as a nontaxable return of…
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
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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…