Required information Problem 17-52 (LO 17-3) (Algo) [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 $15,000 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 Depreciation expense Section 179 expense Interest income (related to business income) Municipal bond income Government fines Overall net income Distributions Ordinary Income Year 1 $ 305,000 (43,000) (40,000) (25,000) Amount (15,000) (30,000) 12,000 1,600 0 $ 165,600 $ 30,000 Problem 17-52 Part a (Algo) 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). Year 2 $ 435,000 (63,000) (80,000) (50,000) (30,000) (50,000) 22,500 Allocated to Allocated to Julio Milania 4,200 (2,000) $ 186,700 $ 50,000
Required information Problem 17-52 (LO 17-3) (Algo) [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 $15,000 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 Depreciation expense Section 179 expense Interest income (related to business income) Municipal bond income Government fines Overall net income Distributions Ordinary Income Year 1 $ 305,000 (43,000) (40,000) (25,000) Amount (15,000) (30,000) 12,000 1,600 0 $ 165,600 $ 30,000 Problem 17-52 Part a (Algo) 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). Year 2 $ 435,000 (63,000) (80,000) (50,000) (30,000) (50,000) 22,500 Allocated to Allocated to Julio Milania 4,200 (2,000) $ 186,700 $ 50,000
SWFT Essntl Tax Individ/Bus Entities 2020
23rd Edition
ISBN:9780357391266
Author:Nellen
Publisher:Nellen
Chapter5: Business Deductions
Section: Chapter Questions
Problem 2BCRQ
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