course: taxation business pasa thru entities

The following information applies to the questions displayed below. Julio and Mil Corporation. In year 2, Julio and Milania each received distributions of $25,000 from Falcons Corporation. lania are owners of Falcons Corporation, an S corporation. They each own 50 percent of Falcons Falcons Corporation (an s Corporation) Income Statement December 31, Year 1 and Year 2 Year 1Year 2 Sales revenue Cost of goods sold Salary to owners Julio and Milania Employee vages Depreciation expense Section 179 expense Interest income (related to $300, 000 $430,000 (40,000) (60,000) 40,000) (80,000) (25,000) (50,000) (20,000) (40,000) (30,000) (50,000) 12,000 22,500 business) Municipal bond income 1,500 4,000 Government fines Overall net income Distributions 0 (2,000) $158,500 $174,500 30,000 50,000 a. What amount of ordinary income and separately stated items are allocated to them for year 2 based on the information above? Assume that Falcons Corporation has $200,000 of qualified property (unadjusted basis). Salary to owners Julio and Milania Employee wages Depreciation expense Section 179 expense Interest income (related to (40,000)(60,000) (40,000) (80,000) (25,000) (50,000) (20,000) (40,000) (30,000) (50,000) 12,000 22,500 business) Municipal bond income Government fines Overall net income 4,000 0 (2,000) $158,500 $174,500 1,500 Distributions 30,000 $50,000 a. What amount of ordinary income and separately stated items are allocated to them for year 2 based on the information above? Assume that Falcons Corporation has $200,000 of qualified property (unadjusted basis) Julio Ordinary Income