Because it is important for accountants to demonstrate the filing requirements for specialized tax returns, for this final project you will be completing a corporate tax return and then analyzing this experience.

Key Component:

Use the financial data from the following file to complete form 1120.

Portfolio_Option1_Financials.xlsx - attached below

Complete the following template that has the respective tax forms and schedules required to complete the return. Complete all of the parts of your respective business tax return for which there is information.

ACT415_Portfolio_Option1_Student_Template.docx - attached below

In the space at the bottom of the template, show your income tax calculations and prepare a write-up on some questions contained within the tax return. Look at the information on Form 1120 Schedule K. With the exception of line 1, discuss the purpose of these questions. (You may select a sub-grouping of these questions to complete your milestone). What are some challenges (identify three to five), both anticipated and unexpected, when completing the corporate tax return? What solutions can you provide to those challenges?

	04/02/2013 - 12/31/2013
Gross Income
	Repair Revenue		$100,000
	Interest Income		$600
	Dividends (Qualified)		$2,000
	Net Short-term Capital Gain		$5,000
		Total Income from all sources	$107,600
Expenses
	Guaranteed payments		$10,000
	Renovation Expense		$5,500
	Rent		$1,500
	Depreciaton expense		$2,066
	Licenses		$500
	Travel Expenses		$800
	Supplies Expenses		$700
	Net Long-term Capital Loss		$10,000
	Charitable Contributions		$5,000
		Total Expenses	$36,066
	Net Income (before federal income taxes)		$71,534
	Cash Dividend Distribution to- Elders		$5,000
	Cash Dividend Distribution to- Fawcett		$6,000
	Cash Dividend Distribution to- Gonzalez		$7,000
			1120 U.S. Corporation Income Tax Return For calendar year 2013 or tax year beginning , 2013, ending , 20 Check if: (1) OMB No. 1545-0123 2013 Form Department of the Treasury Internal Revenue Service Information about Form 1120 and its separate instructions is at www.irs.gov/form1120. B Employer identification number A Check if: 1a Consolidated return (attach Form 851) . . b Life/nonlife consoli- dated return . . . 2 Personal holding co. (attach Sch. PH) . 3 Personal service corp. (see instructions) . . . 4 Schedule M-3 attached C Date incorporated D Total assets (see instructions) $ (4) Address change Name TYPE OR PRINT Number, street, and room or suite no. If a P.O. box, see instructions. . City or town, state, or province, country and ZIP or foreign postal code E Initial return (2) Final return (3) Name change 1a b c 2 3 4 5 6 7 8 9 10 11 Gross receipts or sales . . . . . . . . . . Returns and allowances . . . . . . . . . Balance. Subtract line 1b from line 1a . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cost of goods sold (attach Form 1125-A) . Gross profit. Subtract line 2 from line 1c . Dividends (Schedule C, line 19) . . . Interest. . . . . . . . . . . . . . Gross rents . . . . . . . . . . . . . Gross royalties . . . . . . . . . . . . Capital gain net income (attach Schedule D (Form 1120)) Net gain or (loss) from Form 4797, Part II, line 17 (attach Form 4797) . Other income (see instructionsattach statement) . . . . . . Total income. Add lines 3 through 10 . . . . . . . . . . . . . . . . . . . . . 1a 1b 1c 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29a b c Compensation of officers (see instructionsattach Form 1125-E) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Salaries and wages (less employment credits) Repairs and maintenance . . . . . . Bad debts . . . . . . . . . . Rents . . . . . . . . . . . Taxes and licenses . . . . . . . . Interest........... Charitable contributions . . . . . . Depreciation from Form 4562 not claimed on Form 1125-A or elsewhere on return (attach Form 4562) . . . . Depletion....... Advertising....... Pension, profit-sharing, etc., plans Employee benefit programs . . Domestic production activities deduction (attach Form 8903) . Other deductions (attach statement) . . . . . .. . Total deductions. Add lines 12 through 26 . . . .. . Taxable income before net operating loss deduction and special deductions. Subtract . . . . . . . . . . . . . . line 27 29a . . . . . . . . ...... ...... ...... . . . . . . ...... ...... ...... . . . . . . . . . . . . . . . . . . . . ....... . ....... . ....... . ....... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . from line 11 . . . . . . . 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Net operating loss deduction (see instructions) . Special deductions (Schedule C, line 20) . . . Add lines 29a and 29b . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29b 29c 30 Taxable income. Subtract line 29c from line 28 (see instructions) . 31 Total tax (Schedule J, Part I, line 11) . . . . . . . . . 32 Total payments and refundable credits (Schedule J, Part II, line 21) . 33 Estimated tax penalty (see instructions). Check if Form 2220 is attached 34 Amount owed. If line 32 is smaller than the total of lines 31 and 33, enter amount owed 35 Overpayment. If line 32 is larger than the total of lines 31 and 33, enter amount overpaid 36 Enter amount from line 35 you want: Credited to 2014 estimated tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 Refunded 31 32 . . 33 34 35 36 Under penalties of perjury, I declare that I have examined this return, including accompanying schedules and statements, and to the best of my knowledge and belief, it is true, correct, and complete. Declaration of preparer (other than taxpayer) is based on all information of which preparer has any knowledge. Sign Here Paid Preparer Use Only For Paperwork Reduction Act Notice, see separate instructions. May the IRS discuss this return with the preparer shown below (see instructions)? Yes No Signature of officer Date Title Print/Type preparers name Preparer's signature Date Check if self-employed Firms name Firm's EIN Phone no. PTIN Form 1120 (2013) Firm's address Cat. No. 11450Q Tax, Refundable Credits, and Payments Deductions (See instructions for limitations on deductions.) Income Form 1120 (2013) Page 2 (c) Special deductions (a) (b) Schedule C (a) Dividends received (b) % 1 2 Dividends and Special Deductions (see instructions) Dividends from less-than-20%-owned domestic corporations (other than debt-financed stock) Dividends from 20%-or-more-owned domestic corporations (other than debt-financed stock) 3 Dividends on debt-financed stock of domestic and foreign corporations . . 4 Dividends on certain preferred stock of less-than-20%-owned public utilities . 5 Dividends on certain preferred stock of 20%-or-more-owned public utilities . 6 Dividends from less-than-20%-owned foreign corporations and certain FSCs . 7 Dividends from 20%-or-more-owned foreign corporations and certain FSCs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Dividends from wholly owned foreign subsidiaries . . . 9 Total. Add lines 1 through 8. See instructions for limitation . .... . .... . 10 Dividends from domestic corporations received by a small operating under the Small Business Investment Act of 1958 . . 11 Dividends from affiliated group members . . . . . . 12 Dividends from certain FSCs . . . . . . . . . . 13 Dividends from foreign corporations not included on lines 3, 6, 7, 8, 11, or 12 . 14 Income from controlled foreign corporations under subpart F (attach Form(s) 5471) . 15 Foreign dividend gross-up . . . . . . . . . . . . 16 IC-DISC and former DISC dividends not included on lines 1, 2, or 3 . 17 Other dividends . . . . . . . . . . . . . . 18 Deduction for dividends paid on certain preferred stock of public utilities . 19 Total dividends. Add lines 1 through 17. Enter here and on page 1, line 4 . 20 Total special deductions. Add lines 9, 10, 11, 12, and 18. Enter here and on page 1, line 29b business investment company . .. . . .. . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Form 1120 (2013) Form 1120 (2013) Schedule J Tax Computation and Payment (see instructions) Part ITax Computation Page 3 1 2 3 4 5a b c d e 6 7 8 9a b c d e f 1120)) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Check if the corporation is a member of a controlled group (attach Schedule O (Form Income tax. Check if a qualified personal service corporation (see instructions) Alternative minimum tax (attach Form 4626) . Add lines 2 and 3 . . . . . . . . Foreign tax credit (attach Form 1118) . . . Credit from Form 8834 (see instructions) . . General business credit (attach Form 3800) . Credit for prior year minimum tax (attach Form 8827) Bond credits from Form 8912 . . . . . . . Total credits. Add lines 5a through 5e . . . . Subtract line 6 from line 4 . . . . . . . . Personal holding company tax (attach Schedule PH (Form 1120)) . Recapture of investment credit (attach Form 4255) . . . . . Recapture of low-income housing credit (attach Form 8611) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5a . . . . . . 9b 2 3 4 5b 5c 5d 5e 6 7 8 9c 9d 9e 9f 10 11 Interest due under the look-back methodcompleted long-term contracts (attach Form 8697). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9a . . . 10 Other (see instructionsattach statement) . . . . . Total. Add lines 9a through 9f . . . . . . . . . Total tax. Add lines 7, 8, and 10. Enter here and on page 1, line . . . . 31 . . . . . . . . . . . . . . . Interest due under the look-back methodincome forecast method (attach Form 8866) . Alternative tax on qualifying shipping activities (attach Form 8902) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Part IIPayments and Refundable Credits 12 13 14 15 16 17 18 19 a b c d 20 21 1 2 a b c 3 4 a b 2012 overpayment credited to 2013 . 2013 estimated tax payments . . . 2013 refund applied for on Form 4466 . Combine lines 12, 13, and 14 . Tax deposited with Form 7004 . Withholding (see instructions) . Total payments. Add lines 15, 16, and 17 . Refundable credits from: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ) . . . . . . Form 2439 . . . . . . . . . Form 4136 . . . . . . . . . Form 8827, line 8c . . . . . . . Other (attach statementsee instructions) Total credits. Add lines 19a through 19d . Total payments and credits. Add lines 18 and 20. Enter here and on page 1, line 32 . . 19a . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other Information (see instructions) Check accounting method: a Cash b Accrual c Other (specify) No 12 13 14 ( 15 16 17 18 19b 19c Schedule K 19d 20 21 Yes See the instructions and enter the: Business activity code no. Business activity Product or service Is the corporation a subsidiary in an affiliated group or a parent-subsidiary controlled group? If Yes, enter name and EIN of the parent corporation At the end of the tax year: . ..... Did any foreign or domestic corporation, partnership (including any entity treated as a partnership), directly 20% or more, or own, directly or indirectly, 50% or more of the total voting power of all classes of the corporations stock entitled to vote? If "Yes," complete Part I of Schedule G (Form 1120) (attach Schedule G) . . . . . . . . . . . . . . . . Did any individual or estate own directly 20% or more, or own, directly or indirectly, 50% or more of the total voting power of all classes of the corporations stock entitled to vote? If "Yes," complete Part II of Schedule G (Form 1120) (attach Schedule G) . . . . . . . trust, or tax-exempt organization own Form 1120 (2013) Form 1120 (2013) Page 4 No Schedule K Yes (ii) Employer Identification Number (if any) (iii) Country of Incorporation (ii) Employer Identification Number (if any) (iii) Country of Organization 5 a Other Information continued (see instructions) At the end of the tax year, did the corporation: Own directly 20% or more, or own, directly or indirectly, 50% or more of the total voting power of all classes of stock entitled to vote of any foreign or domestic corporation not included on Form 851, Affiliations Schedule? For rules of constructive ownership, see instructions. If Yes, complete (i) through (iv) below. b (iv) Percentage (i) Name of Corporation Owned in Voting Stock (iv) Maximum Percentage (i) Name of Entity Owned in Profit, Loss, or Capital Own directly an interest of 20% or more, or own, directly or indirectly, an interest of 50% or more in any foreign or domestic partnership (including an entity treated as a partnership) or in the beneficial interest of a trust? For rules of constructive ownership, see instructions. If Yes, complete (i) through (iv) below. 6 7 8 9 10 11 12 13 14 15a b 16 17 18 During this tax year, did the corporation pay dividends (other than stock dividends and distributions in exchange for stock) in excess of the corporations current and accumulated earnings and profits? (See sections 301 and 316.) . . . . . . . . . . . . . . If "Yes," file Form 5452, Corporate Report of Nondividend Distributions. If this is a consolidated return, answer here for the parent corporation and on Form 851 for each subsidiary. At any time during the tax year, did one foreign person own, directly or indirectly, at least 25% of (a) the total voting power of all classes of the corporations stock entitled to vote or (b) the total value of all classes of the corporations stock? . . . . . . . . . For rules of attribution, see section 318. If Yes, enter: (i) Percentage owned and (ii) Owners country (c) The corporation may have to file Form 5472, Information Return of a 25% Foreign-Owned U.S. Corporation or a Foreign Corporation Engaged in a U.S. Trade or Business. Enter the number of Forms 5472 attached Check this box if the corporation issued publicly offered debt instruments with original issue discount . . . . . . . . If checked, the corporation may have to file Form 8281, Information Return for Publicly Offered Original Issue Discount Instruments. Enter the amount of tax-exempt interest received or accrued during the tax year $ Enter the number of shareholders at the end of the tax year (if 100 or fewer) If the corporation has an NOL for the tax year and is electing to forego the carryback period, check here . . . . . . . . If the corporation is filing a consolidated return, the statement required by Regulations section 1.1502-21(b)(3) must be attached or the election will not be valid. Enter the available NOL carryover from prior tax years (do not reduce it by any deduction on line 29a.) $ Are the corporations total receipts (page 1, line 1a, plus lines 4 through 10) for the tax year and its total assets at the end of the tax year less than $250,000? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . If Yes, the corporation is not required to complete Schedules L, M-1, and M-2. Instead, enter the total amount of cash distributions and the book value of property distributions (other than cash) made during the tax year $ Is the corporation required to file Schedule UTP (Form 1120), Uncertain Tax Position Statement (see instructions)? . If Yes, complete and attach Schedule UTP. Did the corporation make any payments in 2013 that would require it to file Form(s) 1099? . . . . . . . If Yes, did or will the corporation file required Forms 1099?. . . . . . . . . . . . . . . . During this tax year, did the corporation have an 80% or more change in ownership, including a change due to redemption of its own stock? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . During or subsequent to this tax year, but before the filing of this return, did the corporation dispose of more than 65% (by value) of its assets in a taxable, non-taxable, or tax deferred transaction? . . . . . . . . . . . . . . . . . . . . . Did the corporation receive assets in a section 351 transfer in which any of the transferred assets had a fair market basis or fair market value of more than $1 million? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . .. . . .. Form 1120(2013) Form 1120 (2013) Page 5 Schedule L Schedule M-1 Balance Sheets per Books Assets Cash. . . . . . . . . Trade notes and accounts receivable Less allowance for bad debts . . Inventories...... . U.S. government obligations . . Tax-exempt securities (see instructions) . . . Other current assets (attach statement) . . . Loans to shareholders . . . . . . . . Mortgage and real estate loans . . . . . Other investments (attach statement) . . . . Buildings and other depreciable assets . . . Beginning of tax year (a) (b) End of tax year (c) (d) 1 2a b 3 4 5 6 7 8 9 10a b 11a b 12 13a b . . . . . . . . . . . . . . . . . . . . () () () () () () () () Less accumulated depreciation Depletable assets . . . . Less accumulated depletion . Land (net of any amortization) . Intangible assets (amortizable only) Less accumulated amortization . Other assets (attach statement) . Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1 2 3 4 5 6 1 2 3 Liabilities and Shareholders Equity Accounts payable . . . . . . . . . Mortgages, notes, bonds payable in less than 1 year Other current liabilities (attach statement) . . Loans from shareholders . . . . . . . Mortgages, notes, bonds payable in 1 year or more Other liabilities (attach statement) . Capital stock: a Preferred stock b Common stock Additional paid-in capital . . Retained earningsAppropriated (attach statement) Retained earningsUnappropriated . . . . Adjustments to shareholders equity (attach statement) Less cost of treasury stock . . . . . . . Total liabilities and shareholders equity . . . . . . . . . . . . . . . . . . . . () () Reconciliation of Income (Loss) per Books With Income per Return Note: Schedule M-3 required instead of Schedule M-1 if total assets are $10 million or moresee instructions Net income (loss) per books . . . . Federal income tax per books . . . . Excess of capital losses over capital gains . Income subject to tax not recorded on books this year (itemize): Expenses recorded on books this year not deducted on this return (itemize): Depreciation . . . . $ . . . . . . a b c Charitable contributions Travel and entertainment Add lines 1 through 5 . . $ . $ . . ..... Analysis of Unappropriated Retained Earnings per Books (Line 25, Schedule L) 7 8 a b Income recorded on books this year not included on this return (itemize): Tax-exempt interest $ Deductions on this return not charged against book income this year (itemize): Depreciation . . $ Charitable contributions $ 9 Add lines 7 and 8 . . . . . . 10 Income (page 1, line 28)line 6 less line 9 Schedule M-2 5 Distributions: a Cash . . . . . bStock .... cProperty . . . . 6 Other decreases (itemize): 7 Add lines 5 and 6 . . . . . . 8 Balance at end of year (line 4 less line 7) Balance at beginning of year Net income (loss) per books Other increases (itemize): . . . . . . . . . . . . 4 Add lines 1, 2, and 3 . . . . . . . . Form 1120 (2013) In the space that follows, show corporate income tax calculations and provide the written requirements of the assignment.