South-western Federal Taxation 2018: Individual Income Taxes
41st Edition
ISBN: 9781337385886
Author: William H. Hoffman, James C. Young, William A. Raabe, David M. Maloney, Annette Nellen
Publisher: Cengage Learning
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Chapter 20, Problem 63P
To determine
Calculate Person D’s taxable income and federal tax liability for 2018.
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Croyden is a calendar year, accrual basis corporation. Mr. and Mrs. Croyden (cash basis taxpayers) are the sole corporate shareholders. Mr. Croyden is president of the corporation, and Mrs. Croyden is vice president. Croyden’s financial records, prepared in accordance with GAAP, show the following information for the year: Use Table 7-1 and Table 7-2
Revenues from sales of goods
$ 12,900,000
Cost of goods sold (LIFO)
(9,260,000)
Gross profit
$ 3,640,000
Bad debt expense
$ 24,000
Administrative salaries and wages
612,000
State and local business taxes
135,000
Interest expense
33,900
Advertising
67,000
Annual property insurance premiums
19,800
Annual life insurance premiums
7,300
Depreciation expense
148,800
Repairs, maintenance, utilities
81,000
Croyden’s records reveal the following facts:
Under the UNICAP rules, Croyden had to capitalize $142,800 of administrative wages to inventory. These wages were expensed for financial statement purposes.
Because of…
On January 1, 2023, Kinney, Inc., an S corporation, reports $33,600 of accumulated E & P and a balance of $84,000 in AAA. Kinney has two
shareholders, Erin and Frank, each of whom owns 500 shares of Kinney's stock. Kinney's nonseparately stated ordinary income for the year
is $42,000.
Kinney distributes $50,400 to each shareholder on July 1, and it distributes another $25,200 to each shareholder on December 21. How are
the shareholders taxed on the distributions? Ignore the 20% QBI deduction.
Do not round intermediate computations. If required, round your final answers to the nearest dollar.
Erin and Frank each report $
dividend income for the July 1 distribution and $
distribution. Assuming that the shareholders have sufficient basis in their stock, Erin and Frank each receive a tax-free
distribution from AAA.
$
each for the December 21
Tiger Corp is a calendar year taxpayer that elected S status in its first year of operations. Tiger is owned by Harbert (600 shares with beginning AB = $12,000) and Leath (400 shares with beginning AB = $8000). The income statement for Tiger Corp is presented below. The corporation’s beginning AAA balance was -$30,000, OAA was $1,000, and Accumulated E&P from prior years as a C corp was $1,000.
Sales Revenue
$105,000
Municipal bond income
$5,000
Cost of goods sold
($45,000)
Salary expense to owners
($20,000)
Employee wages
($5,000)
Net STCG stock sale
$2,000
Depreciation expense
($10,000)
Charitable contributions
($1,000)
Fines and Penalties
($2,000)
Net Income
$29,000
Tax depreciation is $15,000 of which $5,000 is Sec. 179 depreciation. Tiger Corp also made a $10,000 distribution.
Provide a book-tax reconciliation above and distinguish between ordinary business income (loss) and separately stated items…
Chapter 20 Solutions
South-western Federal Taxation 2018: Individual Income Taxes
Ch. 20 - Prob. 1DQCh. 20 - LO.1 Sylvia and Trang want to enter into business...Ch. 20 - Prob. 3DQCh. 20 - Prob. 4DQCh. 20 - Prob. 5DQCh. 20 - Prob. 6DQCh. 20 - LO.3, 4, 5 Contrast the income taxation of...Ch. 20 - LO.3, 8, 9 The taxpayer has generated excess...Ch. 20 - Prob. 9DQCh. 20 - Prob. 10DQ
Ch. 20 - Prob. 11DQCh. 20 - Prob. 12DQCh. 20 - Prob. 13DQCh. 20 - Prob. 14DQCh. 20 - Prob. 15DQCh. 20 - Prob. 16DQCh. 20 - Prob. 17DQCh. 20 - Prob. 18DQCh. 20 - Prob. 19DQCh. 20 - Prob. 20DQCh. 20 - Prob. 21DQCh. 20 - Prob. 22DQCh. 20 - Prob. 23DQCh. 20 - Blaine, Cassie, and Kirstin are equal partners in...Ch. 20 - Prob. 25DQCh. 20 - LO.3 Green Corporation, a calendar year taxpayer,...Ch. 20 - Prob. 27CECh. 20 - Banana Corporation is a May 31 fiscal year...Ch. 20 - LO.4 Gold and Silver are two unrelated calendar...Ch. 20 - Maroon Corporation is a calendar year taxpayer....Ch. 20 - Prob. 32CECh. 20 - Prob. 33CECh. 20 - Prob. 34CECh. 20 - Drab Corporation, a calendar year S corporation,...Ch. 20 - Kim is a 40% shareholder in Taupe Corporation, a...Ch. 20 - Prob. 37CECh. 20 - LO.3, 4, 5 Using the legend provided below,...Ch. 20 - LO.3 Garnet has the following capital asset...Ch. 20 - LO.3, 8 Citron, a calendar year taxpayer, began...Ch. 20 - LO.3 Taupe, a calendar year taxpayer, has a...Ch. 20 - LO.3, 8 Robin had the following capital...Ch. 20 - Prob. 43PCh. 20 - Prob. 44PCh. 20 - Prob. 45PCh. 20 - Prob. 46PCh. 20 - Prob. 47PCh. 20 - Prob. 48PCh. 20 - Prob. 49PCh. 20 - Prob. 50PCh. 20 - Prob. 51PCh. 20 - Prob. 52PCh. 20 - Prob. 53PCh. 20 - Prob. 54PCh. 20 - During the current year, Thrasher (a calendar...Ch. 20 - Prob. 56PCh. 20 - Jim Olsen owns all of the stock in Drake, a...Ch. 20 - Prob. 58PCh. 20 - Prob. 59PCh. 20 - LO.9 The Pheasant Partnership reported the...Ch. 20 - Prob. 61PCh. 20 - Prob. 62PCh. 20 - Prob. 63PCh. 20 - Prob. 1RPCh. 20 - Prob. 2RPCh. 20 - Prob. 3RPCh. 20 - Prob. 5RPCh. 20 - On January 1, year 5, Olinto Corp., an accrual...Ch. 20 - Prob. 2CPACh. 20 - Prob. 3CPACh. 20 - Prob. 4CPACh. 20 - Prob. 5CPACh. 20 - Prob. 6CPACh. 20 - Prob. 7CPA
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