“I am trying to solve some questions, I answer two of them, but not sure if they are correct Chapter 10 23. George and Georgeanne formed and equal shareholders in an S corporation. Each one contributed cash and property with a value of $100,000 for partnership operations. As a result of these contributions, George had a basis of $80,000 and Georgenne a basis of $60,000. At the end of their first year of operations, they had the following results: Gross Sales $150,000 Cost of Good Sold 95,000 Rent expense 15,000 Salaries to employees 15,000 Utilities 4,000 Charitable contributions 1,000 Section 1231 gain 2,000 a. What is the net income, excluding separately stated items that each shareholder is required to report at the end of the year? b. How is each of the separately stated items treated on the shareholder’s tax returns? Section 1231 gain will be included with any other Section 1231 gains and losses in the netting process for each partner. Related to charitable contributions will be included with George and Georgeanne’s other charitable contributions and reported as an itemized deduction. c. What is each shareholder’s basis at year-end 36? During the current year, Biggie, Inc., a delivery company operating as an S Corporation, reported the following results from operations:

Revenue $280,000 Salaries 130,000 Truck expenses 30,000 Taxes 18,000 Section 1231 loss 8,000 Traffic fines 1,200 Interest expense on truck loans 2,000 Interest income (bonds) 500 What are the corporations net income and its separately reported items? Separately Reported Items: Truck expenses 30,000 I will consider this as Sec 179 Section 1231 loss 8,000 Interest expense on truck loans 2,000 Interest income (bonds) 500 Total Separately Reported Items 40,500 Revenue $280,000 Salaries 130,000 Truck expenses 30,000 EBITDA 120,000 Taxes 18,000 Net Income 102,000 37. Crow Corporation, as S corporation from the date of its incorporation, is in the process of liquidating. During the current year, it reports gross receipts of only $40,000; it has passive investment income of $25,000 from assets. It has expenses related to this income of $1,000. Is the corporation liable for the passive investment income tax? 38. The Jane Corporation, an S corporation, makes several property distributions to its two equal shareholders, A and B, during the year. The distributions are as follow: A B Cash $5,000 $5,000 Land (Basis=$5,000) $10,000 (FMV) Equipment (Basis=$15,000) $10,000(FMV) At the beginning of the year, the corporations accumulated adjustments account is $35,000; As basis in his shares is $24,000; and Bs basis is $32,000. The corporation reports net income of $6,000 for the year, excluding any effect of the distributions. Determine the basis in A and Bs shares and the balance in the corporations AAA at the end of the year.Chapter 10

23. George and Georgenne formed and equal shareholders in an S
corporation. Each one contributed cash and property with a value of $100,000
for partnership operations. As a result of these contributions, George had a
basis of $80,000 and Georgenne a basis of $60,000. At the end of their first
year of operations, they had the following results:

Gross Sales $150,000
Cost of Good Sold 95,000
Rent expense 15,000
Salaries to employees 15,000
Utilities 4,000
Charitable contributions 1,000
Section 1231 gain 2,000

a.
What
is the net income, excluding separately stated items that each shareholder is
required to report at the end of the year?

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b.
How
is each of the separately stated items treated on the shareholders tax
returns?
Section 1231
gain will be included with any other Section 1231 gains and losses in the
netting process for each partner. Related to charitable contribution will be
included with George and Georgenne other charitable contributions and reported
as an itemized deduction.

c.
What
is each shareholders basis at year-end

.0/msohtmlclip1/01/clip_image004.png””>

36. During the current year, Biggie, Inc., a
delivery company operating as an S Corporation, reported the following results
from operations:

Revenue $280,000
Salaries 130,000
Truck expenses 30,000
Taxes 18,000
Section 1231 loss 8,000
Traffic fines 1,200
Interest expense on truck loans 2,000
Interest income (bonds) 500

What are
the corporations net income and its separately reported items?

Separately
Reported Items:

Truck expenses 30,000
I will consider this as Sec 179
Section 1231 loss 8,000
Interest expense on truck loans 2,000
Interest income (bonds) 500

Total Separately
Reported Items 40,500

Revenue $280,000
Salaries 130,000
Truck expenses 30,000
EBITDA 120,000
Taxes 18,000
Net Income 102,000

37. Crow Corporation, as S corporation from the date of its incorporation,
is in the process of liquidating. During the current year, it reports gross
receipts of only $40,000; it has passive investment income of $25,000 from
assets. It has expenses related to this income of $1,000. Is the corporation
liable for the passive investment income tax?

38. The Jane Corporation, an S corporation, makes
several property distributions to its two equal shareholders, A and B, during
the year. The distributions are as follow:

A B
Cash $5,000 $5,000
Land (Basis=$5,000) $10,000 (FMV)
Equipment (Basis=$15,000) $10,000(FMV)

At the beginning of the year, the corporations
accumulated adjustments account is $35,000; As basis in his shares is $24,000;
and Bs basis is $32,000. The corporation reports net income of $6,000 for the
year, excluding any effect of the distributions. Determine the basis in A and
Bs shares and the balance in the corporations AAA at the end of the year.Chapter 1023. George and Georgenne formed and equal shareholders in an S
corporation. Each one contributed cash and property with a value of $100,000
for partnership operations. As a result of these contributions, George had a
basis of $80,000 and Georgenne a basis of $60,000. At the end of their first
year of operations, they had the following results: Gross Sales $150,000Cost of Good Sold 95,000Rent expense 15,000Salaries to employees 15,000Utilities 4,000Charitable contributions 1,000Section 1231 gain 2,000a.
What
is the net income, excluding separately stated items that each shareholder is
required to report at the end of the year?.0/msohtmlclip1/01/clip_image002.png””>b.
How
is each of the separately stated items treated on the shareholders tax
returns?Section 1231
gain will be included with any other Section 1231 gains and losses in the
netting process for each partner. Related to charitable contribution will be
included with George and Georgenne other charitable contributions and reported
as an itemized deduction.c.
What
is each shareholders basis at year-end.0/msohtmlclip1/01/clip_image004.png””>36. During the current year, Biggie, Inc., a
delivery company operating as an S Corporation, reported the following results
from operations:Revenue $280,000Salaries 130,000Truck expenses 30,000Taxes 18,000Section 1231 loss 8,000Traffic fines 1,200Interest expense on truck loans 2,000Interest income (bonds) 500What are
the corporations net income and its separately reported items?Separately
Reported Items:Truck expenses 30,000
I will consider this as Sec 179Section 1231 loss 8,000Interest expense on truck loans 2,000Interest income (bonds) 500Total Separately
Reported Items 40,500Revenue $280,000Salaries 130,000Truck expenses 30,000EBITDA 120,000Taxes 18,000Net Income 102,00037. Crow Corporation, as S corporation from the date of its incorporation,
is in the process of liquidating. During the current year, it reports gross
receipts of only $40,000; it has passive investment income of $25,000 from
assets. It has expenses related to this income of $1,000. Is the corporation
liable for the passive investment income tax?38. The Jane Corporation, an S corporation, makes
several property distributions to its two equal shareholders, A and B, during
the year. The distributions are as follow: A BCash $5,000 $5,000Land (Basis=$5,000) $10,000 (FMV) Equipment (Basis=$15,000) $10,000(FMV)At the beginning of the year, the corporations
accumulated adjustments account is $35,000; As basis in his shares is $24,000;
and Bs basis is $32,000. The corporation reports net income of $6,000 for the
year, excluding any effect of the distributions. Determine the basis in A and
Bs shares and the balance in the corporations AAA at the end of the year.”