Question
Paige owns 1,000 shares of Grubstake Mining & Development common stock. Grubstake is organized as an S corporation and has 100,000 share outstanding. Grubstake reported
Paige owns 1,000 shares of Grubstake Mining & Development common stock. Grubstake is organized as an S corporation and has 100,000 share outstanding. Grubstake reported taxable income of $200,000 and paid a distribution of $1.00 per share during the current year. Grubstake typically does not send out its K-1 reports until late April. However, its preliminary report has been consistent with the K-1 for many years. Which indicates the following: Distribution to shareholder $1,000 Ordinary income (1% of $200,000) $2,000 Paige does not materially participate in Grubstake's activities. Where and how are these amounts included and taxed on an individual's tax return?
Step by Step Solution
3.51 Rating (154 Votes )
There are 3 Steps involved in it
Step: 1
Answer The distribution would be included on the individuals tax return as income from an S corporation The ordinary income would be included on the i...Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get StartedRecommended Textbook for
Concepts In Federal Taxation
Authors: Kevin E. Murphy, Mark Higgins, Tonya K. Flesher
19th Edition
978-0324379556, 324379552, 978-1111579876
Students also viewed these Accounting questions
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
View Answer in SolutionInn App