course: taxation business pass thru entities

Required information [The following information applies to the questions displayed below Julio and Milania are owners of Falcons Corporation, an S corporation. They each own 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 Year 1 Year 2 $300,000 $430,000 Sales revenue Cost of goods sold Salary to owners Julio and Milania Employee wages Depreciation expense Section 179 expense Interest income (related to business) Municipal bond income Government fines Overall net income (40,000) (60,000) (40,000) (80,000) (25,000) (50.000) (20,000) (40,000) (30,000) (50,000) 12,000 22,500 1,5004,000 $158,500 $174,500 Distributions $ 30,000 50,000 a. What amount of ordinary income and separately stated items are Assume that Falcons Corporation has $200,000 of qualified property (unadjusted basis) allocated to them for year 1 based on the information above? Falcons Corporation (an S Corporation) Income Statement December 31, Year 1 and Year 2 Year 1Y $300,000 $430,000 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) Municipal bond income Government fines Overall net income (40,000) (60,000) (40,000) (80,000) (25,000) (50,000) (20,000) (40,000) (30,000) (50,000) 12,000 22,500 1,500 4,000 (2,000 $158,500 $174,500 - Distributions 30,000 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 $200,000 of qualified property (unadjusted basis). Allocated to Allocated to Julio Ordinary Income Section 179 expense Interest income Municipal bond income Distributions 30,000 15,000 15,000 1,500 750 750 30,00015,000 $15,000