Jack and Jill are owners of UpAHill, an S Corporation. They own 25 and 75 percent, respectively. UpAHill Corporation (an S Corporation) Income Statement December 31, Year 1 and Year 2 Sales revenue Cost of goods sold Salary to owners Jack and Jill Employee wages Depreciation expense Miscellaneous expenses Interest income (related to business) Qualified dividend income Overall net income Ordinary income Dividend income Interest income Allocated wages Unadjusted basis of qualified property a. What amount of ordinary income and separately stated items are allocated to them for years 1 and 2 based on the information above? Assume that UpAHill Corporation has $100,000 of qualifie property (unadjusted basis) in both years. Year 2 $ 310,000 (85,000) (40,000) (50,000) (15,000) (20,000) (10,000) (15,000) (7,500) (9,000) 2,000 500 Year 1 $ 45,000 500 $44,500 $ Year 1 $ 175,000 (60,000) 2,500 1,000 $ 45,000 $ 134,500 Answer is complete but not entirely correct. Jack 25 * $ 11,125 $ Year 2 Year 1 $134,500 $ 45,000 $1,000 $ 500 44,500 $ 133,500 $ 25 * $ 33,375 $ Jill Year 2 $134,500 > $1,000 X $133,500 > 75 X 75 × $ 33,375 $ 100,125

Jack and Jill are owners of UpAHill, an S Corporation. They own 25 and 75 percent, respectively. UpAHill Corporation (an S Corporation) Income Statement December 31, Year 1 and Year 2 Sales revenue Cost of goods sold Salary to owners Jack and Jill Employee wages Depreciation expense Miscellaneous expenses Interest income (related to business) Qualified dividend income Overall net income Ordinary income Dividend income Interest income Allocated wages Unadjusted basis of qualified property a. What amount of ordinary income and separately stated items are allocated to them for years 1 and 2 based on the information above? Assume that UpAHill Corporation has $100,000 of qualifie property (unadjusted basis) in both years. Year 2 $ 310,000 (85,000) (40,000) (50,000) (15,000) (20,000) (10,000) (15,000) (7,500) (9,000) 2,000 500 Year 1 $ 45,000 500 $44,500 $ Year 1 $ 175,000 (60,000) 2,500 1,000 $ 45,000 $ 134,500 Answer is complete but not entirely correct. Jack 25 * $ 11,125 $ Year 2 Year 1 $134,500 $ 45,000 $1,000 $ 500 44,500 $ 133,500 $ 25 * $ 33,375 $ Jill Year 2 $134,500 > $1,000 X $133,500 > 75 X 75 × $ 33,375 $ 100,125

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter13: Choice Of Business Entity—general Tax And Nontax Factors/formation

Section: Chapter Questions

Problem 46P

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