Question 1 50 pts Entity was formed several years ago. At the beginning of this year. Chris acquired a 35% interest in the Entity by transferring property worth $65,000 in which she had basis of $50,000. At the beginning of this year, the Entity had recourse debt of $200,000. This year, Chris loaned $20,000 (bona fide debt) to the Entity. The Entity's results for the year are as follows: Loss from operations ($520,000) LTCG 40,000 Municipal bond interest income 32.000 Charitable contributions 4,000 Interest expense related to muni bond 8,000 In addition, during the year, Chris received a distribution of $48,000. If the entity is a C corporation, assume that the distribution is a dividend. At the end of this year, the Entity's balance sheet shows recourse debt balance of $100,000. The Chris Loan balance remains unchanged. Required (a, b and c): a) Assume Entity is a General Partnership - Compute Chris's outside basis. b) Assume Entity is an Scorporation - Compute Chris's outside basis. c) Assume Entity is a C corporation - Compute Chris's outside basis. HTML Editon x BIVA-AIE * 5. Do v , ! 12pt E - Paragraph - D Question 2 50 pts AUS entity that begin business last year shows the following information in its current year financial records: Net Income per Books: 600,000 Included in Net Income per Books are the following items: Federal Income Tax Expense 150,000 Property Taxes 30.000 Dividends Received from a 17% Owned Corporation 200,000 Net 1231 Loss 45,000 Short-term capital gain 55,000 Long-term capital gain 75,000 Short-term capital loss 25,000 Charitable Contributions 60,000 Last year, the entity generated a tax loss of $30,000. Required (a and b): a) Assume that the corporation is a C Corporation. Provide a schedule showing the corporation's taxable income for the year b) Assume that the corporation is an Scorporation. Compute the corporation's non-separately stated (ordinary income) and separately stated items. HTML Editor Question 1 50 pts Entity was formed several years ago. At the beginning of this year. Chris acquired a 35% interest in the Entity by transferring property worth $65,000 in which she had basis of $50,000. At the beginning of this year, the Entity had recourse debt of $200,000. This year, Chris loaned $20,000 (bona fide debt) to the Entity. The Entity's results for the year are as follows: Loss from operations ($520,000) LTCG 40,000 Municipal bond interest income 32.000 Charitable contributions 4,000 Interest expense related to muni bond 8,000 In addition, during the year, Chris received a distribution of $48,000. If the entity is a C corporation, assume that the distribution is a dividend. At the end of this year, the Entity's balance sheet shows recourse debt balance of $100,000. The Chris Loan balance remains unchanged. Required (a, b and c): a) Assume Entity is a General Partnership - Compute Chris's outside basis. b) Assume Entity is an Scorporation - Compute Chris's outside basis. c) Assume Entity is a C corporation - Compute Chris's outside basis. HTML Editon x BIVA-AIE * 5. Do v , ! 12pt E - Paragraph - D Question 2 50 pts AUS entity that begin business last year shows the following information in its current year financial records: Net Income per Books: 600,000 Included in Net Income per Books are the following items: Federal Income Tax Expense 150,000 Property Taxes 30.000 Dividends Received from a 17% Owned Corporation 200,000 Net 1231 Loss 45,000 Short-term capital gain 55,000 Long-term capital gain 75,000 Short-term capital loss 25,000 Charitable Contributions 60,000 Last year, the entity generated a tax loss of $30,000. Required (a and b): a) Assume that the corporation is a C Corporation. Provide a schedule showing the corporation's taxable income for the year b) Assume that the corporation is an Scorporation. Compute the corporation's non-separately stated (ordinary income) and separately stated items. HTML Editor
