Problem 17-52 (LO 17-3) (Static)
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Julio and Milania are owners of Falcons Corporation, an S corporation. Each owns 50 percent of Falcons Corporation. In year 1, Julio and Milania each received distributions of $15,000 from Falcons Corporation. 
c. Complete Julios 1120-S, Schedule K-1, for year 1.
Falcons Corporation (an S Corporation) Income Statement December 31, Year 1 and Year 2 Year 1 Sales revenue $ 300,000 Cost of goods sold (40,000) Salary to owners Julio and Milania (40,000) Employee wages (25,000) Depreciation expense (20,000) Section 179 expense (30,000) Interest income (related to business) 12,000 Municipal bond income 1,500 Government fines Overall net income $ 158,500 Distributions $ 30,000 Year 2 $ 430,000 (60,000) (80,000) (50,000) (40,000) (50,000) 22,500 4,000 (2,000) $ 174,500 $ 50,000 1 671119 Final K 1 Amended K 1 OMB No. 1546-0123 Schedule K-1 2019 Part III Shareholder's Share of Current Year Income, (Form 1120-S) Deductions, Credits, and Other Items Department of the Treasury For calendar year 2019, or tax year Ordinary business income loss! 13 Credits Intemal Revenue Service beginning 2019 ending Net rental cal estate incomo loss) Shareholder's Share of Income, Deductions, Other not rental income lossj Credits, etc. See back of form and separate instructions. 4 Interest income Part 1 Information About the Corporation 2 3 A Corporation's employer icientification number 5a Ordinary dividonds 14 B Corporation's name, adress, city, state, and ZIP code 5b Qualified dividonda Foreign transactions 6 Poyalties 7 Net short-term capital gain (loss! CIRS Center where corporation filed returri Ba Net long-term capital gain foss) Bb Collectibles (28%) gan loss) Part II Information About the Shareholder D Shareholder's identifying number Bc Unrecaptured section 1250 gain E Shareholder's name, address, city, statc, and ZIP code 9 Net section 1231 gain (losa) 10 Other income loss) 15 Alternat ve minimum tex (AMT) items F Shareholder's percentage of stock ownership for lax year % 11 Section 179 ceduction 16 items affecting shareholder basis 12 Other deductions For IRS Use Only 17 Other information 18 More than one activity for al-risk purposes More than one activity for passive activity purposes 19 * See attached statement for additional information. For Paperwork Reduction Act Notice, see the Instructions for Form 1120-S. www.irs.gowForm11205 Cat No. 115200 Schedule K-1 (Form 1120-S) 2019 Page 2 Schedule K-1 Form 1120-S1 2019 This list identifies the codes used on Schedule K-1 for all shareholders and provides summarized reporting information for shareholders who file Form 1040 or 1040-SR. For detailed reporting and filing information, see the separate Shareholder's Instructions for Schedule K-1 and the instructions for your income tax return. 1. Ordinary business income (1088). Determine whether the income cass passive or nonpassive and enter on your return as follows: Report on Passive In Scc the Shareholder's Instructions Passive income Schedule E, line 28, columnih) Nonpassive loss See the Shareho der's Instructions Nonpassive income Schedule E, line 28, column 2. Net rental real estate income (loss} See the Shareholder's Instructions 3. Other net rental income foss) Net income Schedule L. line 28, column th) Net loss See the Shareholder's Instructions 4. Interest income For 1040 or 1040-SR linn 2b) 6a. Ordinary dividends Form 1040 or 1040-SR, line 25 5b. Qualified dividends For 1040 or 1040-SR, line la 6. Royalties Schedulc Eline 4 7. Net short-term capital gain (loss) Schedule D lino 5 8a. Net long-term capital gain (loss) Schedule D line 12 Bb. Collectibles (28%) gain (loss) 2a X Rate Gain Worksheel, line 4 (Schedule Instructions 8c. Unrecaptured section 1250 gain See the Shareholder's instructions 9. Net section 1231 gain (loss) See the Shareholder's Instructions 10. Other income foss) Cade A Other portfolio income (losa) See the Shareholder's Instructions B Involuntary conversions See the Shareholder's Instructions C Sec. 1258 contracts & straddles For 8781, line 1 D Mining exploration costs recepture See Pub. 535 E Reserved for future use F Section 906(n) inclusion G Income under subpart Father than inclusions under sections See the Shareholder's Instructions 951A and 966) H Other incorrect 11. Section 179 deduction See the Shareheker's instructions 12 Other deductions A Cash contributions (60%) B Cash oontributions (30%) C Noncash contributions (50%) D Noncash contributions (30%) Sex: the Shareholder's Instructions E Capital gain property to a 50% organization (309) F Capital gain properly (20%) G Contributions (100% H Investment interest expense Form 1952, line 1 | Deductions-royalty Income Schedule E. line 19 J Section 59/01/2) expenditures See the Shareho der's Instructions K Section S660 deduction See the Shareholder's Instructions L Deductions-portfolio (other) Schedule A. line 16 M Preproductive period expenses Scc the Shareholder's Instructions N Commercial revitalization deduction from rental real estate activities See Form 8582 instructions O Felurestation expense deduction See the Shareholder's Instructions P through R Reserved for future use S Other deductions See the Shareholder's Instructions 13. Credits A Low-income housing credit section 420015) from pre 2005 buildings B Low-income housing credit other from pre-2008 buildings C Low-income housing credit section 42000n from post-2007 buildings See the Sharcholder's D Low-income housing credit fother) Instructions from post 2007 buildings E Qualified rehabilitation expenditures (rental real estate F Other rental real estate credits GOther rental credits Schedule 3 (Fom 1010 10/10-SRI.line H Undistributed capital gains credit 13, box a | Boluel producer credit J Work opportunity credit K Disabled access credit See the Shareholder's L Empowerment zone employment credit Instructions M Credit for increasing research activities Code Report on N Credit for player social scurily and Medicare laxes See the Sharehol's Instructor o Backup withholding P Other credits 14. Foreign transactions A Name of country or US poin B Gross income from all sources Form 1118. Paarl C Grose income sourced at shareholder level Foreign gross income sourced al corporale level D Reserved for future uso E Foreign branch category F Pansive category G General category Form 1116, Part 1 H Other Deductions allocated and apportioned at shareholder level Interessi experise Form 1118, Paarl J Other Forn 1116, Part 1 Deductions allocated and apportioned at corporate level to foreign source income K Reserved for future un L Foreign branch category M Passive category N General category Form 1116, Part! O Other Other information P total foreign taxes paid Form 1116, Part 1 O Tolal foreign laxes accrued Form 1118, Part II R Reduction in taxes available for credit Form 1116, line 12 S Foreign trading gross racaints Form 3873 T Extreterritoral Income exclusion Fonn 8873 U Section 965 information See the Shareholder's Instructions V Other foreign transactions See the shareholder's Instructions 15. Alternative minimum tax (AMT) items A Post 1986 Hupracation Adjustment B Adjusted gain or loss C Depletion (other than oil & gas) See the Shareholder's Instructions D Oigas, & geathermal-gross income and the Instructions for Form 6251 E Cilgis, & geatherra-caduction F Other AMT items 16. Items affecting shareholder basis A Tax-exempt interest income Form 1010 or 10/0-SR, line 2a B Other tax-exempt income C Nordeductible expenses D Distributions See the Shareholder's Instructions E Repayment of loans from Shareholders 17. Other information A Investrrcnt income Forn 4952, line 4a B Investment expenses Fonn 4952, line 5 C Qualified rehabilitationi nxpenditures aller than rental real estate See the Shareholder's Instructions D Basis of energy property See the Shareholder's Instructions E Recapture of low income housing credit section 420851) Forri 3811, lina a F Fiecapture of low-income housing credit (other) Form 8811, line 8 G Mecapture of investment Credit See Form 4255 H Recapture of other credits See the Shareholder's Instructions I Look-back interest - completed long-term contracts See Form 8697 J Look-back interest-income forecast method See Form 8866 K Dispositions of property with Scion 179 deductions L Recapture of section 179 deduct on See the Sharcholder's Instructions M through U V Section 199A information w through Z Reserved for future use AA Excess taxable income AB Excess business interest noome See the Shareholder's Instructions AC Other information
