How are losses allocated to S Corporation owners ?

Q: How are restrictions of retained earnings reported?

A:

Q: How are the Capital al losses deducted from capital gains?

A: When an asset such as property for investment purpose (not for personal use), cars and investment…

Q: When is the fair value method used for recording interest in a separate company?

A: The methods for recording interest in a separate company are as follows: Fair value method Amortized…

Q: naked debenture

A: Debentures which are not secured by specific assets is known as Naked debentures.

Q: In an S Corporation are the unit holders liable for busin

A: Yes, they are liable for business losses too if they fulfill these requirements.

Q: What are arguments for and against preferential treatment of capital gains?

A: Capital gain defined as the increase in the value of the capital asset and it is realized when the…

Q: How is sale of property recorded in individual taxation? What are the classifications of property…

A: Individual taxation involves the assessment and collection of taxes on income, capital gains, and…

Q: Which item, if it exists, is NOT required to be presented as a line item on the face of statement of…

A: The statement of profit or loss is prepared at the end of the accounting period and it is also a…

Q: What is qualified business income deduction in taxation/accounting? And, how is it used to reduce…

A: Certain business owners can benefit from the Qualified Business Income (QBI) deduction. Taxpayers…

Q: In accounting for an estate or trust, how is the distinction between principal and income…

A: In accounting for an estate or trust, principal means the property or assets which have been…

Q: Distinguish between paid-in capital and retained earningsof a corporation. Why is such a distinction…

A: Paid-in capital and retained earnings are the two main categories of stockholders' equity.

Q: How do business owners determine their taxable income from their business ventures? How does this…

A: The given answer for the above mentioned question is given in the following steps for your…

Q: Does the management of long term assets benefit the business in anyway? Are there tax benefits as…

A: Assets  is a resource which has economic value and gives benefit to the company directly and…

Q: Relative to corporate formation, how can one contribute appreciated property without gaining…

A: Relative to corporate formation, how can one contribute appreciated property without gaining…

Q: When there is no specified agreement in the profit-sharing, what happens to the distribution of the…

A: The partnership comes into existence when two or more persons agree to do the business and further…

Q: What tax strategies are available to a company seeking to make an acquisition

A: A process known as an acquisition is when one firm buys all or the majority of the shares of another…

Q: Which of the following is not deductible from business income? Group of answer choices Casual…

A: Business income is earned revenue that includes all money generated by an entity's operations.…

Q: What are holding companies? What are theiradvantages and disadvantages?

A: Holding companies: Holding company is a corporation that does not carried out any processes,…

Q: What are the short-term effect and the long-term effect of improperly capitalizing expenditures on…

A: Financial statements are prepared by the company to present its financial position at a given point…

Q: What is the impact of deferred annuities in consideration to business matter?

A: The legal contract between any entity and an insurance company is a deferred annuity contract. The…

Q: When are distributions to shareholders in an s corporation taxable and non taxable?

A: S corporation is one of the popular business entity for people looking for new businesses. The…

Q: COMPREHENSIVE PROBLEMS a connect Select problems are available in Connect®. 56. Several years ago,…

A: In a partnership, two or more parties agree to operate and manage a business and share the profits…

Q: What are the accounting items corresponding to additions to wealth for shareholders, lenders and the…

A: The objective of the question is to identify the accounting items that correspond to the increase in…

Q: What is the difference between a ‘net capital gain’ and a ‘capital gain, and between a ‘net capital…

A: The question is related to Capital Gain head. Capital gain means any profit or gain arising out of…

Q: What type of taxpayers (entities) are affected by the passive loss rules? What is the significance of…

A: The passive loss rules affect various types of taxpayers, including individuals, estates, trusts,…

Q: What is ascertained from the income and expense of an entity?

A: Profit and Loss is the difference between income or expense.  If income is more than the expense, it…

Q: When we look at GAAP are corporations required by GAAP to have an accrual or cash basis of…

A: According to Generally Accepted Accounting Principles (GAAP), corporations are required to use the…

Q: are dividends considered Capital Gain? Give Code Section

A: Dividend represents the profit distributed among the shareholders of the company. Its is reported in…

Q: Will the decision about the transfer price affect consolidated net income? Which method would be…

A: Transfer price is the price at which one division tansfers a product to another division within the…

Q: l financing affects tax liability

A: Step 1 Debt financing is well regulated under U.S. tax law. Businesses can deduct interest payments…

Q: Define capital gain (loss)

A: Whenever an asset is sold, the seller incurs either a profit or a loss. The asset may be a real…

Q: When is the intra-entity’s profits recognized on transfers between the investor and investee?

A: The period in which intra-entity’s profits recognized on transfers between the investor and investee…

Q: In acquiring a Long Term Asset, what are the tax benefits that an entity may have?

A: Concept of tax saving on acquiring the long term assets

Q: explain the difference between the net income and net income available for common shareholders.

A: Introduction:- i)Net income means as follows under:- Net income means deduction of all expenses…

Q: How does depreciation give tax benefits? What are the advantages of Internal Financing?

A: “Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: What is the difference in the tax treatment of interest anddividends paid by a corporation? Does…

A: Introduction: Usually, dividend is nothing but, sharing a portion of profits of the corporation, as…

Q: Why might the decision to own rather than lease real estate have an unfavorable effect on the…

A: Real estate investing: Real estate investing is defined as the acquisition of property as an…

Q: Which of the following is an example of a tax credit available to businesses? A) Depreciation B) Net…

A: The Research and Development (R&D) tax credit (option C) is an example of a tax credit available…

Q: How can we determine the corporate taxable income?

A: Taxable income: It can be defined as the income which serves as the base for computing the tax…

Capital Gain

Any capital asset when sold can give the seller a higher or lower price from its purchase price leading to a capital gain or capital loss. The time period of holding an asset is decided based on if it is a long term or short-term capital gain. On that basis, the rate of taxation is decided if it is 20%, 15% or according to the tax brackets. The rate of taxation differs in the case of equity or debt, whether long or short term. The capital gain can be adjusted from capital loss to arrive at a net capital gain. The amount of gains and the exemption has to be reported in the tax return filed in the financial year in which the asset was transferred. The tax return can be filed quarterly, monthly, semi-annually or annually.