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 $14,000 from Falcons Corporation. Falcons Corporation (an S Corporation) Income Statement December 31, Year 1 and Year 2 Sales revenue Cost of goods sold Salary to owners Julio and Milania Employee wages Year 1 $ 305,000 (43,000) Year 2 $ 435,000 (63,000) (40,000) (80,000) (25,000) 50,000) Depreciation expense Section 179 expense Interest income (related to business income) Municipal bond income (15,000) (30,000) (30,000) (50,000) 10,000 Government fines Overall net income Distributions 1,300 0 $ 163,300 18,500 3,600 (2,000) $ 182,100 $ 28,000 $ 50,000 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 $200,000 of qualified property (unadjusted basis). Ordinary Income Distributions Municipal bond income Qualified business income Section 179 expense Allocated wages Unadjusted basis of qualified property Amount Julio Allocated to Allocated to Milania
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 $14,000 from Falcons Corporation. Falcons Corporation (an S Corporation) Income Statement December 31, Year 1 and Year 2 Sales revenue Cost of goods sold Salary to owners Julio and Milania Employee wages Year 1 $ 305,000 (43,000) Year 2 $ 435,000 (63,000) (40,000) (80,000) (25,000) 50,000) Depreciation expense Section 179 expense Interest income (related to business income) Municipal bond income (15,000) (30,000) (30,000) (50,000) 10,000 Government fines Overall net income Distributions 1,300 0 $ 163,300 18,500 3,600 (2,000) $ 182,100 $ 28,000 $ 50,000 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 $200,000 of qualified property (unadjusted basis). Ordinary Income Distributions Municipal bond income Qualified business income Section 179 expense Allocated wages Unadjusted basis of qualified property Amount Julio Allocated to Allocated to Milania
SWFT Essntl Tax Individ/Bus Entities 2020
23rd Edition
ISBN:9780357391266
Author:Nellen
Publisher:Nellen
Chapter4: Gross Income
Section: Chapter Questions
Problem 11P
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