Question
Hi guys, I need help with these question. Thank you so much On January 1, 2022, Sam and Sara formed a new business entity called
Hi guys, I need help with these question. Thank you so much
On January 1, 2022, Sam and Sara formed a new business entity called Nice Brother Co. Sam contributes $250,000 cash and Sara contributes land with an adjusted basis of $300,000 and fair market value of $492,000 with a mortgage of $258,000 that is assumed by Nice Brother Co.
Assume the following operating results for 2022:
Sales | $ 1,500,000 |
Interest income from a bank | $ 3,200 |
Royalties | $ 60,000 |
Loss from sale of investment | $ (7,000) |
Cost of goods sold | $ 622,000 |
Salaries | $ 450,000 |
Rent | $ 144,000 |
Maintenance | $ 24,000 |
Utilities | $ 58,000 |
EPA penalty | $ 1,000 |
Depreciation | ? |
Charitable contribution | $ 30,000 |
Payment to Sam for retirement* | $ 15,000 |
*payment considered a guaranteed payment if the entity is a partnership
The companys only depreciable asset is equipment (useful life of 5 years) which will be purchased in 2022 for $100,000.
The only asset sold was an investment purchased on 2/2/22 for $28,000 and sold on 11/4/22 for $21,000
- What are the separately stated items allocated to Sara if the entity is a Partnership?
- What are the separately stated items allocated to Sara if the entity is a S Corporation?
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