Problem 56. Assume teh same facts as problem 55.. write a letter to her, summarizing the changes to stock basis that the current year transactions caused.

as investments. Emerald Corporation has a capital loss carry-over from the previous year of $80,000 and has accumulated E & P in excess of $2 million. Barney and Faye have come to you for advice. Suggest an attractive tax plan to carry out what the parties want. Write a letter (addressed to Emerald Corporation at PO Box 940, Rochester, NY 14692) describing your plan and its tax consequences. 55. LO.8 During the current year. Thrasher (a calendar vear, accrual basis S corpora- tion) has the following transactions: Sales Cost of goods sold Long-term capital gain Short-term capital gain $1,500,000 900,000 11,000 Salaries 5,000 Qualified dividends from stock investments 210,000 30,000 Rent expense 170,000 Advertising expense Interest expense on business loan $ 1231 gain Organizational expenditures Charitable contributions Bad debt (trade account receivable deemed to be uncollectible) Cash dividend distributed to shareholders 20,000 15,000 25,000 3,000 5,000 10,000 120,000 Determine Thrasher Corporation's separately stated items for the current year. Determine Thrasher's ordinary business income for the current year. SS 56. LO.8 Assume the same facts as in Problem . Kirby Turner is a 20 % shareholder Communications in Thrasher Corporation. She is aware of the tax consequences of the various items listed on the Schedule K-1 (Form 1120S) she received but does not understand their effect on basis. She is considering selling her stock and wants to estimate the gain or loss that will result. In response to Kirby's request for assistance, write a letter to her (1120 Garden Way, Elizabeth, NJ 07207), summarizing the changes to stock basis that the current year transactions caused Decision Making Oun owns all of the stock in Drake, a calendar year S corporation