PROBLEM 2-INDIVIDUALS (FORM 1040) Andrew (Andy) S. and Sarah H. Clark are husband and wife and live at 4112 Foxglove Drive, McKinney, TX 75070. Andy is a retired petroleum engineer, and Sarah is a portrait artist. They choose to file a joint tax return each year. 1. When he retired at age 65, Andy was chief of offshore operations at Pelican Exploration Corporation. While employed, Andy participated in Pelican's contributory qualified pension plan, to which he had contributed $250,000 (in after-tax dollars). Under one of the plan options, he chose a life-annuity payout of $60,000 per year over his life. As part of his retirement package, Andy also received nontaxable health insurance coverage for him and Sarah. Due to Andy's expertise in Gulf of Mexico offshore operations, Pelican continues to use his services on a consulting basis (see item 3 below). 2. Sarah, an accomplished artist, is well known regionally for oil portraits (business activity code 711510). She paints in the Photorealism style, providing her clients with portraits that are often mistaken for photographs. Painting in this style is very time-consuming. Consequently, her output averages between 15 and 16 portraits a year. Her fee of $3,200 per portrait was set several years ago and never varies. As this is quite reasonable for a Photorealistic oil portrait, she has a long waiting list APPENDIX Set Com e t Pot APPENDIXE Practice Set Compute r Pro of clients who have not yet been scheduled for sitting She does all of her work in the studio the Clarks maintain th e selem 6 below. Sarah is a cash busixpayer with respect to art business 3. During 2018, Andy made seven trips on behalf of Pelican as an outside consultant business activity code 541330). On a typical trip, Andy flies by commercial airline to New Orleans Houston, or Corpus Christ, and then takes a company helicopter to the o ne plasm a ry, bataata local motel Sonne site consultos can solve the pob anda up to the mig is not necessary His expens for these this as follow Aare Lodging 55.100 1100 Ground transportation is mostlar After each trip, Andy recover his expenses when he is paid by Pelican for the services rendered. Pelican does not require an accounting for the expenses and reimburses Andy based on his verbal report of how much he spent 1. In curly January 2018, Sarah was paid for three portraits she painted and delivered in late 2017. During 2018, Sarah completed 14 portraits Payment was received for 11 portraits when they were delivered to the buyers. One portrait was delivered in mid- 2018 to the CEO of a company who promised puyment within 30 days. Payment was Ver received, and the company has since entered bankruptcy. Since the CEO has been indicted for secunkies fraud, Sarah focis certain that she will never be paid for the portrait. The final two ports were delivered in late 2018, and payments for both were received in early 2019. In December 2018, Sarah accepted $3,200 as payment for a portrait to be done in 2019. Although she did not be the arrangement, the customer said the prepayment was motivated by anticipated cash flow considerations 5. Sarah keeps receipts for all her expenses. Her total cost for painting supplies in 2018 was $3,010 (ex. for Canvases, brushes, oil paints, mocks, palettes, and other art supplies). The framing of the finished portrait is left to the customer since the most appropriate frame is a matter of personal time and consideration for where the painting will be exhibited. 6 For convenience and security reasons, Surah prefers to work at home. One-fourth of the 4,000 square foot living area is devoted to Sarah's studio, The Clarks built the home at a cost of $ 1,000 on a los previously acquired for $100,000, and they moved in on June 15, 2015. As to business ise, depreciation is based on MACRS (using the midmonth convention applicable to 39-yeur nonresidential reality Besides home mortpape Interest and property taxes (see item 19 below), residence expenses for 2018 are summarized below Us 5400 My Mancing wice Service fee for home security system Removal of stains from studio teoring Homeowners Insurance Reparto de light 7. At a mortgage foreclosure suction held on February 4, 2005, Andy acquired an abandoned sugarcane farm near Magnol known as Lalu Place for $30,000 In view of the expansion trend in ney Houston, he regarded the purchase as a good investment Early in 2018 Ady was cuncted by a Houston real estate developer who offund $250,000 for La Place. Considering the prospect of a lar ble Andy a d for a property swap by wie boce on May 10 In exchange for several cartoon Padre Island X worth $240,000 and cash of $10.000, Andy transferred LaBeaux Place to the developer. The exchange took place on June 20, 2018 & Andy purchased improved lund (EX for $18.200 at an auction held on April 17. 1992. Decxd as Block 16, the property was adjacent to a modest prison to farm wed by Uw Tuas Department of Comections (TDO Andy bought the peoprty and on a bunch that the TDC day wish to expands Neamt fart late 2017, the TTC contacted And and offered him $160.000 for Block 6 Andy countered with a selling price of $225.000. After prolonged nepotiations, Andy and the TDC could not come to a mutually agreeable selling price. The TDC then threatened to condemn Block 66. After repeated threat of condemnation, Andy undermed the property to the TDC on June 24, 2018, SIND 000. On December 17, 2018 Andy reinvested $175.000 in vacant land located near Texas Sue Univery in San Marcos Andy spent the remaining $5.000 on a vacation for him and Sarah to Hawail in early 2019. 9. The Clarks had always thought that taking extended road trips in an RV would be fun. So, in June 2011, they bought a new Winnebago Deluxe Coach RV for $106.250 $100.000 (discounted list price) $6 250 state sales tax However, it only took Andy and Sarah Two weeks on the road to determine that this method of traveline the continental United States was not for them. In Aupost 2012 they sold the RV to a neighbor for $90,000. The neighbor paid $20,000 down and paid the balance of $70,000 in early December 2018, Andy did not change his neighbor any interest 10. On May 9, 2000, Andy's father gave him 400 shares of Ragusa Corporation common stock as a birthday gift. The stock con his father $16,000 ($40 a share) and was worth $20,000 on the date of the gift. In 2012, when the stock was worth $140 per share, Ragusa declared a 2.for lock split. On July 27, 2018, Andy sold 400 shares for $20.000 ($50 share). For sentimental reasons, Andy kept the remaining 400 share kom 1099 11 did not report the basis of this property. 11. On December 21, 2018, the Clarks sold 500 shares of Cormorant Power common stock for $40.000 (SHO share). They purchased the stock on February 1, 2018, for $50 OKI ($100 a share), the basis reported on Form 1099-1. The Clarks sold the stock to generate a loto offset some of their capital gains. However, they considered Cormorant Power to be a good investment, so they repurchased 500 shares on February 19, 2019, for $45.000 ($90 a share) 12. On March 2, 2017, Sarah was contacted by a Haum, a former college roommate, Over lunch Eva asked Sarah for a loan of $6,000 to help finance a new venture, Sarah made the loan because the ven u mmer art camp in Sedona, Arizona, sounded interesting va signed a wote due in two years at 10% interest. In late 2018, Sarah lesumed that had disappeared after being charged by Arizona authorities with grand theft. She also leamed that is wanted in New Mexico for parole violation from a prior felony conviction Eva made no payments to Sarah on the 13. The Clarks have a long term capital loss carryover of $7.000 from 2017. 14. On May 9, 2013. Maximilia Clark (Andy's favorite uncle) ed him the family antique un collection used on family records and qualified a nalsals, the collection had an added basis Maximilian of $200 and was worth $13.000 on the date of Since Sarabes uns, Andy has been under heavy DOSSUM to get rid of the collection. Alter Maximilian died in early 2018 Andy donated the collection to the Remember the Alamo Foundation. The transfer was made on December 5, 2018 At that time, several qualified appraisers valued the collection at $16.000. The museum added the guns to extensive collection of firearms 15. while walking the dog in late December 2017 Sarah was hit by an out of control delivery truck. The mishap sent Sarah to the hospital for several days of observation and medical evaluation. Aside from bruises, she suffered to permanent nury. Once apprehended, the driver of the truck was ticketed for DUT The On of the truck, a local s tor for national brewery, was quite concerned about the adverse publicity that would result Sarah hled a lawsuit. Consequently, it APPENDIX Set Assignments-Comprehensive Problems APPENDIX E Dues to professional organisations (Andy) 5 140 State professional sense fee Andy! 2017 tax return preparation fee ($200 for Andy's business $250 for Sarah's business, and $450 for personal income tax retum 900 Texas does not impose an income tax, so the Clarks choose the state and local sales tax option. In addition to the state general sales tax, the local sales tarte is 2% 1% city 1% Community development. They do not keep track of sales tax expenditures for routine purchases (es. clothes prepared foods) but can verify the sales taxon exceptional items Gie, big-ticket purchases like the 20. The Clarks made quarterly Federal income tax payments of $2,400 on each of the following dates: April 10, 2018 June 11, 2018 September 10, 2018 and December 28, 2018 Last year's Federal income tax retum reflected an overpayment of $800 x which the Clarks chose to apply to their 2018 income tax liability. The trustee of Andy's retirement plan also withheld $6.500 of tax with respect to his retirement withdrawals for the year. Neither Andy nor Sarah holds any foreign financial accounts. Relevant Social Security numbers are noted below Social Security Number 123-456785 123-45-6786 Andrews. Clark Sarah HC Gabrielle Soares Malone Scars Birth Date 09/15/1947 12/03/1952 oses 0625/2012 06/20/2012 123-45-6787 123-4567 Practice Set Assignments-Comm ersive Tax Return Problems paid all her medical expenses and offered Sarah a settlement if she would siena release. Under the terms of the settlement, Sarah would receive $134,000, which was $121, for personal Injury and $8,000 for loss of income because her injuries prevented her from painting for a period of weeks. On January 31, 2018, Sarah signed the release and was immediately paid $134,000 16. In August 2017, Andy was rear-ended while stopped for a red light. Thankfully, Andy was uninjured. However, his car was damaged. The driver who caused the accident left the scene immediately. so Andy was forced to use his insurance to repair the damage to his car. As a result, Andy was subject to the $1.000 deductible provision in the policy, which he paid with respect to his car repair in 2017. The Clarks claimed no deductions with respect to the accident on their 2017 income tax retum. In 2018, the insurance company Peregrine Casualty) located the driver at fault and ved the amount paid for repair by both Andy and Puregrine Consequently, in April 2018, Andy received a check from Peregrine refunding the $1,000 he paid for repairs according to his policy's deductible. 17. After an acrimonious divorce, the Clarks's only child (Gabrielle Sparks) moved back home in December 2017. She brought her twins (Malone and Macie) with her. Under the divorce decree, Gabrielle was given custody of the children and awarded child support of $2,100 a month. The decree does not indicate who is entitled to the dependency exemptions for the children. Following the divorce Gabrielle is taking some time to decide how to move forward with her life. She did not work in 2018, so she has no income for the year except the H200 she received for two months of child support. She plans to incite legal proceedings against her ex-husband for delinquent child support. Subsequent to Gabrielle moving back home. Andy and Sarah peovided all of Gabrielle's and the twins support beyond the $4,200 received in child support 18. Besides the em already mentioned, the Clarks have the following receipts for 2018 Social Security benefits Andy, $12,000 Sarah, 56,000) $18.000 Consulting income paid by Pelican including expense bursement of $11,150 ltem 3) 35.000 Life insurance proceeds we below! Qualified divided income reported on separate Forms 1099-OVE Ragusa Corporation Pecan Power Interest income reported on separate Form 1099-NT) BM bands National Bank of Money Wells Fargo money market fund Cty of Beaumont (TX) general purpose bonds The life insurance proceeds concerned a policy owned by Maximilian Clark (sce item 14), which named Andy as sole beneficiary. The receipt of the proceeds came as a complete surprise to Andy as he never knew the policy existed. 19. Payments made for 2018 expenditures not already mentioned are as follows: Payment of Gabriele legales and court continent to her divorce $9.000 Medics Medicare insurance premiums for Andy and som Healthcare pro f or dependens 2100 Dental implants for Sarah Taxes on personal residence Interest on home mortgage 2.300 Cash donations to New Samaria Baptist Church, McKinney, TX 1,200 Professional journals: Oil and gas related Andy Art related Sarah Requirements Prepare an income tax return (with all appropriate forms and schedules) for the Clarks for 2018 following these guidelines Make necessary assumptions for information not given in the problem but needed to complete the retum The Clarks are employing the same tax retum preparer who completed their prior year tax retum The taxpayers have substantiation (ez necords recies o pport all transactions for the year . If any refund is due, the Clarks want it applied to next year's tax liability The Clarks do nox want to contribute to the Presidential Election Campaign Pund 9.00 PROBLEM 3-C CORPORATION (FORM 1120) 1. On November 1, 2008 June Morton and Kim Wong fomed et Kingdom, Inc., to sell pets and pet supplies. Pertinent information regarding Pet Kingdoms summarized as follows Pet Kingdoms as address is 1010 Northwest Parkway, Dallas, TX 75225. elephone number is 210 555-2211, and its email address is p ungdomki.com The employer dentification number is 11-1111111, and the principal business activity code 45910 Janet and Kim each own 50% of the common stock, Janet is president and Kim is vice president of the company. No other class of wock is authorized Both Janet and Kim are full time employees of Pet Kingdom Janet's Social Security numbers 123-45-6789, and Kim's Social Security number is 987-65-4321 PROBLEM 2-INDIVIDUALS (FORM 1040) Andrew (Andy) S. and Sarah H. Clark are husband and wife and live at 4112 Foxglove Drive, McKinney, TX 75070. Andy is a retired petroleum engineer, and Sarah is a portrait artist. They choose to file a joint tax return each year. 1. When he retired at age 65, Andy was chief of offshore operations at Pelican Exploration Corporation. While employed, Andy participated in Pelican's contributory qualified pension plan, to which he had contributed $250,000 (in after-tax dollars). Under one of the plan options, he chose a life-annuity payout of $60,000 per year over his life. As part of his retirement package, Andy also received nontaxable health insurance coverage for him and Sarah. Due to Andy's expertise in Gulf of Mexico offshore operations, Pelican continues to use his services on a consulting basis (see item 3 below). 2. Sarah, an accomplished artist, is well known regionally for oil portraits (business activity code 711510). She paints in the Photorealism style, providing her clients with portraits that are often mistaken for photographs. Painting in this style is very time-consuming. Consequently, her output averages between 15 and 16 portraits a year. Her fee of $3,200 per portrait was set several years ago and never varies. As this is quite reasonable for a Photorealistic oil portrait, she has a long waiting list APPENDIX Set Com e t Pot APPENDIXE Practice Set Compute r Pro of clients who have not yet been scheduled for sitting She does all of her work in the studio the Clarks maintain th e selem 6 below. Sarah is a cash busixpayer with respect to art business 3. During 2018, Andy made seven trips on behalf of Pelican as an outside consultant business activity code 541330). On a typical trip, Andy flies by commercial airline to New Orleans Houston, or Corpus Christ, and then takes a company helicopter to the o ne plasm a ry, bataata local motel Sonne site consultos can solve the pob anda up to the mig is not necessary His expens for these this as follow Aare Lodging 55.100 1100 Ground transportation is mostlar After each trip, Andy recover his expenses when he is paid by Pelican for the services rendered. Pelican does not require an accounting for the expenses and reimburses Andy based on his verbal report of how much he spent 1. In curly January 2018, Sarah was paid for three portraits she painted and delivered in late 2017. During 2018, Sarah completed 14 portraits Payment was received for 11 portraits when they were delivered to the buyers. One portrait was delivered in mid- 2018 to the CEO of a company who promised puyment within 30 days. Payment was Ver received, and the company has since entered bankruptcy. Since the CEO has been indicted for secunkies fraud, Sarah focis certain that she will never be paid for the portrait. The final two ports were delivered in late 2018, and payments for both were received in early 2019. In December 2018, Sarah accepted $3,200 as payment for a portrait to be done in 2019. Although she did not be the arrangement, the customer said the prepayment was motivated by anticipated cash flow considerations 5. Sarah keeps receipts for all her expenses. Her total cost for painting supplies in 2018 was $3,010 (ex. for Canvases, brushes, oil paints, mocks, palettes, and other art supplies). The framing of the finished portrait is left to the customer since the most appropriate frame is a matter of personal time and consideration for where the painting will be exhibited. 6 For convenience and security reasons, Surah prefers to work at home. One-fourth of the 4,000 square foot living area is devoted to Sarah's studio, The Clarks built the home at a cost of $ 1,000 on a los previously acquired for $100,000, and they moved in on June 15, 2015. As to business ise, depreciation is based on MACRS (using the midmonth convention applicable to 39-yeur nonresidential reality Besides home mortpape Interest and property taxes (see item 19 below), residence expenses for 2018 are summarized below Us 5400 My Mancing wice Service fee for home security system Removal of stains from studio teoring Homeowners Insurance Reparto de light 7. At a mortgage foreclosure suction held on February 4, 2005, Andy acquired an abandoned sugarcane farm near Magnol known as Lalu Place for $30,000 In view of the expansion trend in ney Houston, he regarded the purchase as a good investment Early in 2018 Ady was cuncted by a Houston real estate developer who offund $250,000 for La Place. Considering the prospect of a lar ble Andy a d for a property swap by wie boce on May 10 In exchange for several cartoon Padre Island X worth $240,000 and cash of $10.000, Andy transferred LaBeaux Place to the developer. The exchange took place on June 20, 2018 & Andy purchased improved lund (EX for $18.200 at an auction held on April 17. 1992. Decxd as Block 16, the property was adjacent to a modest prison to farm wed by Uw Tuas Department of Comections (TDO Andy bought the peoprty and on a bunch that the TDC day wish to expands Neamt fart late 2017, the TTC contacted And and offered him $160.000 for Block 6 Andy countered with a selling price of $225.000. After prolonged nepotiations, Andy and the TDC could not come to a mutually agreeable selling price. The TDC then threatened to condemn Block 66. After repeated threat of condemnation, Andy undermed the property to the TDC on June 24, 2018, SIND 000. On December 17, 2018 Andy reinvested $175.000 in vacant land located near Texas Sue Univery in San Marcos Andy spent the remaining $5.000 on a vacation for him and Sarah to Hawail in early 2019. 9. The Clarks had always thought that taking extended road trips in an RV would be fun. So, in June 2011, they bought a new Winnebago Deluxe Coach RV for $106.250 $100.000 (discounted list price) $6 250 state sales tax However, it only took Andy and Sarah Two weeks on the road to determine that this method of traveline the continental United States was not for them. In Aupost 2012 they sold the RV to a neighbor for $90,000. The neighbor paid $20,000 down and paid the balance of $70,000 in early December 2018, Andy did not change his neighbor any interest 10. On May 9, 2000, Andy's father gave him 400 shares of Ragusa Corporation common stock as a birthday gift. The stock con his father $16,000 ($40 a share) and was worth $20,000 on the date of the gift. In 2012, when the stock was worth $140 per share, Ragusa declared a 2.for lock split. On July 27, 2018, Andy sold 400 shares for $20.000 ($50 share). For sentimental reasons, Andy kept the remaining 400 share kom 1099 11 did not report the basis of this property. 11. On December 21, 2018, the Clarks sold 500 shares of Cormorant Power common stock for $40.000 (SHO share). They purchased the stock on February 1, 2018, for $50 OKI ($100 a share), the basis reported on Form 1099-1. The Clarks sold the stock to generate a loto offset some of their capital gains. However, they considered Cormorant Power to be a good investment, so they repurchased 500 shares on February 19, 2019, for $45.000 ($90 a share) 12. On March 2, 2017, Sarah was contacted by a Haum, a former college roommate, Over lunch Eva asked Sarah for a loan of $6,000 to help finance a new venture, Sarah made the loan because the ven u mmer art camp in Sedona, Arizona, sounded interesting va signed a wote due in two years at 10% interest. In late 2018, Sarah lesumed that had disappeared after being charged by Arizona authorities with grand theft. She also leamed that is wanted in New Mexico for parole violation from a prior felony conviction Eva made no payments to Sarah on the 13. The Clarks have a long term capital loss carryover of $7.000 from 2017. 14. On May 9, 2013. Maximilia Clark (Andy's favorite uncle) ed him the family antique un collection used on family records and qualified a nalsals, the collection had an added basis Maximilian of $200 and was worth $13.000 on the date of Since Sarabes uns, Andy has been under heavy DOSSUM to get rid of the collection. Alter Maximilian died in early 2018 Andy donated the collection to the Remember the Alamo Foundation. The transfer was made on December 5, 2018 At that time, several qualified appraisers valued the collection at $16.000. The museum added the guns to extensive collection of firearms 15. while walking the dog in late December 2017 Sarah was hit by an out of control delivery truck. The mishap sent Sarah to the hospital for several days of observation and medical evaluation. Aside from bruises, she suffered to permanent nury. Once apprehended, the driver of the truck was ticketed for DUT The On of the truck, a local s tor for national brewery, was quite concerned about the adverse publicity that would result Sarah hled a lawsuit. Consequently, it APPENDIX Set Assignments-Comprehensive Problems APPENDIX E Dues to professional organisations (Andy) 5 140 State professional sense fee Andy! 2017 tax return preparation fee ($200 for Andy's business $250 for Sarah's business, and $450 for personal income tax retum 900 Texas does not impose an income tax, so the Clarks choose the state and local sales tax option. In addition to the state general sales tax, the local sales tarte is 2% 1% city 1% Community development. They do not keep track of sales tax expenditures for routine purchases (es. clothes prepared foods) but can verify the sales taxon exceptional items Gie, big-ticket purchases like the 20. The Clarks made quarterly Federal income tax payments of $2,400 on each of the following dates: April 10, 2018 June 11, 2018 September 10, 2018 and December 28, 2018 Last year's Federal income tax retum reflected an overpayment of $800 x which the Clarks chose to apply to their 2018 income tax liability. The trustee of Andy's retirement plan also withheld $6.500 of tax with respect to his retirement withdrawals for the year. Neither Andy nor Sarah holds any foreign financial accounts. Relevant Social Security numbers are noted below Social Security Number 123-456785 123-45-6786 Andrews. Clark Sarah HC Gabrielle Soares Malone Scars Birth Date 09/15/1947 12/03/1952 oses 0625/2012 06/20/2012 123-45-6787 123-4567 Practice Set Assignments-Comm ersive Tax Return Problems paid all her medical expenses and offered Sarah a settlement if she would siena release. Under the terms of the settlement, Sarah would receive $134,000, which was $121, for personal Injury and $8,000 for loss of income because her injuries prevented her from painting for a period of weeks. On January 31, 2018, Sarah signed the release and was immediately paid $134,000 16. In August 2017, Andy was rear-ended while stopped for a red light. Thankfully, Andy was uninjured. However, his car was damaged. The driver who caused the accident left the scene immediately. so Andy was forced to use his insurance to repair the damage to his car. As a result, Andy was subject to the $1.000 deductible provision in the policy, which he paid with respect to his car repair in 2017. The Clarks claimed no deductions with respect to the accident on their 2017 income tax retum. In 2018, the insurance company Peregrine Casualty) located the driver at fault and ved the amount paid for repair by both Andy and Puregrine Consequently, in April 2018, Andy received a check from Peregrine refunding the $1,000 he paid for repairs according to his policy's deductible. 17. After an acrimonious divorce, the Clarks's only child (Gabrielle Sparks) moved back home in December 2017. She brought her twins (Malone and Macie) with her. Under the divorce decree, Gabrielle was given custody of the children and awarded child support of $2,100 a month. The decree does not indicate who is entitled to the dependency exemptions for the children. Following the divorce Gabrielle is taking some time to decide how to move forward with her life. She did not work in 2018, so she has no income for the year except the H200 she received for two months of child support. She plans to incite legal proceedings against her ex-husband for delinquent child support. Subsequent to Gabrielle moving back home. Andy and Sarah peovided all of Gabrielle's and the twins support beyond the $4,200 received in child support 18. Besides the em already mentioned, the Clarks have the following receipts for 2018 Social Security benefits Andy, $12,000 Sarah, 56,000) $18.000 Consulting income paid by Pelican including expense bursement of $11,150 ltem 3) 35.000 Life insurance proceeds we below! Qualified divided income reported on separate Forms 1099-OVE Ragusa Corporation Pecan Power Interest income reported on separate Form 1099-NT) BM bands National Bank of Money Wells Fargo money market fund Cty of Beaumont (TX) general purpose bonds The life insurance proceeds concerned a policy owned by Maximilian Clark (sce item 14), which named Andy as sole beneficiary. The receipt of the proceeds came as a complete surprise to Andy as he never knew the policy existed. 19. Payments made for 2018 expenditures not already mentioned are as follows: Payment of Gabriele legales and court continent to her divorce $9.000 Medics Medicare insurance premiums for Andy and som Healthcare pro f or dependens 2100 Dental implants for Sarah Taxes on personal residence Interest on home mortgage 2.300 Cash donations to New Samaria Baptist Church, McKinney, TX 1,200 Professional journals: Oil and gas related Andy Art related Sarah Requirements Prepare an income tax return (with all appropriate forms and schedules) for the Clarks for 2018 following these guidelines Make necessary assumptions for information not given in the problem but needed to complete the retum The Clarks are employing the same tax retum preparer who completed their prior year tax retum The taxpayers have substantiation (ez necords recies o pport all transactions for the year . If any refund is due, the Clarks want it applied to next year's tax liability The Clarks do nox want to contribute to the Presidential Election Campaign Pund 9.00 PROBLEM 3-C CORPORATION (FORM 1120) 1. On November 1, 2008 June Morton and Kim Wong fomed et Kingdom, Inc., to sell pets and pet supplies. Pertinent information regarding Pet Kingdoms summarized as follows Pet Kingdoms as address is 1010 Northwest Parkway, Dallas, TX 75225. elephone number is 210 555-2211, and its email address is p ungdomki.com The employer dentification number is 11-1111111, and the principal business activity code 45910 Janet and Kim each own 50% of the common stock, Janet is president and Kim is vice president of the company. No other class of wock is authorized Both Janet and Kim are full time employees of Pet Kingdom Janet's Social Security numbers 123-45-6789, and Kim's Social Security number is 987-65-4321