Citrus Corporation is a calendar year S corporation with the following current year information: Operating loss $(360,000) Liabilities: Notes payable, Big Apple Bank 90,000 Notes payable, Grapefruit (individual) 60,000 On January 1 Grapefruit bought 60% of Citrus Corporation for $135,000. She then loaned Citrus Corporation $60,000 (the amount above under liabilities). How much of the operating loss may Grapefruit deduct currently? Assume the excess business loss limitation does not apply.

Citrus Corporation is a calendar year S corporation with the following current year information: Operating loss $(360,000) Liabilities: Notes payable, Big Apple Bank 90,000 Notes payable, Grapefruit (individual) 60,000 On January 1 Grapefruit bought 60% of Citrus Corporation for $135,000. She then loaned Citrus Corporation $60,000 (the amount above under liabilities). How much of the operating loss may Grapefruit deduct currently? Assume the excess business loss limitation does not apply.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

The LD TV Corporation had taxable income of $815,000 this past year. Its cost of goodssold was $0.8 million and its operating expenses were $300,000. Interest expenses onoutstanding debts were $100,000, and the company paid $30,000 in preferred stockdividends. The company received interest income of $15,000. Determine LD TV’s sales.
Addison Corporation is currently going through a Chapter 11 bankruptcy. The company has the following account balances for the current year. Prepare an income statement for this organization. The effective tax rate is 20 percent (realization of any tax benefits is anticipated).
Last year, Martyn Company had $500,000 in taxable income from its operations, $50,000 in interest income, and $100,000 in dividend income. Using the corporate tax rate table given below, what was the company's tax liability for the year?
Heery kali
Citrus Corporation is a calendar year 5 corporation with the following current year information: Operating loss Liabilities: Notes payable, Big Apple Bank 570,000 Notes payable, Grapefruit (individual) 380,000 On January 1 Grapefruit bought 60% of Citrus Corporation for $855,000. She then loaned Citrus Corporation $380,000 (the amount above under labilities). How much of the operating loss may Grapefruit deduct currently? Assume the excess business loss limitation does not apply. $1.425.000 $(2,280,000) $1,235,000 O 51.520,000 $1083.000
Gis a cash basis consultant.His balance sheet at the end of the year shows receivables of $100 and accounts payable for utilities of $30. What is G's basis in the receivables? If G transfers the receivables to a new corporation in exchange for 100% of the stock and the corporation assumes the liabilities is G taxed on the transfer?
During the current year, Elements Corporation has the following transactions: Income from operations $450,000 Expenses from operations 470,000 Dividends received fromR Corporation * 150,000 *Elements owns 10% of the stock in R Corporation. How much is Element Corporation’s taxable income (loss) for the year.
Martin Company has 500k in taxable income, 50k in interest income, 100k in dividend income. Using the corporate tax rate table, what is the company's tax liability for the year?
McCannon Inc. has been in operations for four years. The first three years it accumulated operating losses of $82400. In the fourth year it earned $30900 in operating income. In the current year, its fifth year, it had $20600 of operating income and $5150 of dividend income from Irving Inc. McCannon owns 15% of Irving Inc. What is McCannon’s taxable income in the fifth year, assuming the 80% taxable income limit applies for all the years? [For your answer, please ignore the dollar sign and the comma.]
St. George, Incorporated reported $711,800 net income before tax on this year’sfinancial statement prepared in accordance with GAAP. The corporation’s recordsreveal the following information:Four years ago, St. George realized a $283,400 gain on the sale of investmentproperty and elected the installment sale method to report the sale for taxpurposes. Its gross profit percentage is 50.12, and it collected $62,000 principaland $14,680 interest on the installment note this year.Five years ago, St. George purchased investment property for $465,000 cash froman LLC. Because St. George and the LLC were related parties, the LLC’s $12,700realized loss on the sale was disallowed for tax purposes. This year, St. George soldthe property to an unrelated purchaser for $500,000.A flood destroyed several antique carpets that decorated the floors of corporateheadquarters. Unfortunately, St. George’s property insurance does not coverdamage caused by rising water, so the loss was uninsured. The carpets’…
None
The Yellow Corp has $750,000 of debt outstanding, and it pays an interest rate of 8% annually. Its annual sales are $2.25 million, its average tax rate is 25%, and its net profit margin on sales is 12%. The company has depreciation expense of $27,000 with no amortization. What is the EBITDA coverage for Yellow Corp? O 7.38x 0742 O 745x 07.34x