Required information [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 $14,000 from Falcons Corporation. Sales revenue Cost of goods sold Falcons Corporation (an S Corporation) Income Statement December 31, Year 1 and Year 2 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 Year 1 $ 325,000 Year 2 $ 455,000 (41,000) (64,000) (40,000) (80,000) (30,000) (60,000) (17,000) (34,000) (30,000) (50,000) 10,000 1,900 18,500 4,800 (3,000) $ 178,900 $ 187,300 $ 28,000 $ 50,000 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 $220,000 of qualified property (unadjusted basis). Answer is complete but not entirely correct. Amount Allocated to Julio Ordinary Income Section 179 expense Qualified business income Municipal bond income Distributions Allocated wages $ 193,000 $ 98,500 Allocated to Milania $ 98,500 30,000 15,000 15,000 119,000 14,000 14,000 ( 1,900 950 950 $ 28,000 $ 14,000 ( $ 14,000 ( $ 70,000 ( $ 35,000 $ 35,000 ( Unadjusted basis of qualified property $220,000 ( $110,000 $ 110,000 (
Required information [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 $14,000 from Falcons Corporation. Sales revenue Cost of goods sold Falcons Corporation (an S Corporation) Income Statement December 31, Year 1 and Year 2 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 Year 1 $ 325,000 Year 2 $ 455,000 (41,000) (64,000) (40,000) (80,000) (30,000) (60,000) (17,000) (34,000) (30,000) (50,000) 10,000 1,900 18,500 4,800 (3,000) $ 178,900 $ 187,300 $ 28,000 $ 50,000 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 $220,000 of qualified property (unadjusted basis). Answer is complete but not entirely correct. Amount Allocated to Julio Ordinary Income Section 179 expense Qualified business income Municipal bond income Distributions Allocated wages $ 193,000 $ 98,500 Allocated to Milania $ 98,500 30,000 15,000 15,000 119,000 14,000 14,000 ( 1,900 950 950 $ 28,000 $ 14,000 ( $ 14,000 ( $ 70,000 ( $ 35,000 $ 35,000 ( Unadjusted basis of qualified property $220,000 ( $110,000 $ 110,000 (
Chapter28: Income Taxati On Of Trusts And Estates
Section: Chapter Questions
Problem 8DQ
Related questions
Question
None
![Required information
[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 $14,000 from Falcons
Corporation.
Sales revenue
Cost of goods sold
Falcons Corporation (an S Corporation)
Income Statement
December 31, Year 1 and Year 2
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
Year 1
$ 325,000
Year 2
$ 455,000
(41,000)
(64,000)
(40,000)
(80,000)
(30,000)
(60,000)
(17,000)
(34,000)
(30,000)
(50,000)
10,000
1,900
18,500
4,800
(3,000)
$ 178,900
$ 187,300
$ 28,000
$ 50,000
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 $220,000 of qualified property (unadjusted basis).
Answer is complete but not entirely correct.
Amount
Allocated to
Julio
Ordinary Income
Section 179 expense
Qualified business income
Municipal bond income
Distributions
Allocated wages
$ 193,000 $ 98,500
Allocated to
Milania
$ 98,500
30,000
15,000
15,000
119,000
14,000
14,000 (
1,900
950
950
$ 28,000
$
14,000 (
$
14,000 (
$ 70,000 ( $
35,000
$
35,000 (
Unadjusted basis of qualified property
$220,000 (
$110,000
$
110,000 (](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fbc6693b8-38fc-445f-a274-488dd224380f%2Fec1ed661-bce7-43b4-8e5c-ea2c1a96ad75%2Frwcgd5g_processed.png&w=3840&q=75)
Transcribed Image Text:Required information
[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 $14,000 from Falcons
Corporation.
Sales revenue
Cost of goods sold
Falcons Corporation (an S Corporation)
Income Statement
December 31, Year 1 and Year 2
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
Year 1
$ 325,000
Year 2
$ 455,000
(41,000)
(64,000)
(40,000)
(80,000)
(30,000)
(60,000)
(17,000)
(34,000)
(30,000)
(50,000)
10,000
1,900
18,500
4,800
(3,000)
$ 178,900
$ 187,300
$ 28,000
$ 50,000
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 $220,000 of qualified property (unadjusted basis).
Answer is complete but not entirely correct.
Amount
Allocated to
Julio
Ordinary Income
Section 179 expense
Qualified business income
Municipal bond income
Distributions
Allocated wages
$ 193,000 $ 98,500
Allocated to
Milania
$ 98,500
30,000
15,000
15,000
119,000
14,000
14,000 (
1,900
950
950
$ 28,000
$
14,000 (
$
14,000 (
$ 70,000 ( $
35,000
$
35,000 (
Unadjusted basis of qualified property
$220,000 (
$110,000
$
110,000 (
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
Recommended textbooks for you