Question requirements on attached file.

Tax\t\u0000 Return\t\u0000 Final\t\u0000 Project\t\u0000 Sun\t\u0000 &\t\u0000 Fun\t\u0000 Summary\t\u0000 Can\t\u0000 be\t\u0000 done\t\u0000 in\t\u0000 small\t\u0000 groups\t\u0000 (2- 3)\t\u0000 Due\t\u0000 on\t\u0000 the\t\u0000 last\t\u0000 day\t\u0000 of\t\u0000 class\t\u0000 \u0000 On\t\u0000 June\t\u0000 6,\t\u0000 2001,\t\u0000 Joe\t\u0000 Mooney\t\u0000 and\t\u0000 Guy\t\u0000 Flick\t\u0000 formed\t\u0000 Sun\t\u0000 and\t\u0000 Fun\t\u0000 Beach\t\u0000 Products\t\u0000 to\t\u0000 manufacture\t\u0000 and\t\u0000 sell\t\u0000 beach\t\u0000 gear,\t\u0000 toys,\t\u0000 and\t\u0000 accessories.\t\u0000 For\t\u0000 several\t\u0000 years\t\u0000 prior,\t\u0000 Joe\t\u0000 had\t\u0000 run\t\u0000 a\t\u0000 smaller\t\u0000 shop\t\u0000 \"Cheap\t\u0000 Beach\t\u0000 Stuff\"\t\u0000 which\t\u0000 operated\t\u0000 as\t\u0000 a\t\u0000 cash\t\u0000 basis\t\u0000 sole\t\u0000 proprietorship.\t\u0000 Cheap\t\u0000 Beach\t\u0000 Stuff\t\u0000 reported\t\u0000 the\t\u0000 following\t\u0000 balance\t\u0000 sheet:\t\u0000 \u0000 \u0000 June\t\u0000 6,\t\u0000 2001\t\u0000 \u0000 Tax\t\u0000 Basis\t\u0000 Fair\t\u0000 Value\t\u0000 Cash\t\u0000 6,137\t\u0000 6,137\t\u0000 Accounts\t\u0000 Receivable\t\u0000 0\t\u0000 24,558\t\u0000 Inventory\t\u0000 60,647\t\u0000 129,305\t\u0000 Building\t\u0000 55,250\t\u0000 110,000\t\u0000 Land\t\u0000 29,750\t\u0000 55,000\t\u0000 \u0000 151,784\t\u0000 325,000\t\u0000 \u0000 \u0000 \u0000 Accounts\t\u0000 Payable\t\u0000 0\t\u0000 13,189\t\u0000 Notes\t\u0000 Payable\t\u0000 24,000\t\u0000 24,000\t\u0000 Mortgage\t\u0000 on\t\u0000 Land/Building\t\u0000 40,000\t\u0000 40,000\t\u0000 Equity\t\u0000 87,784\t\u0000 247,811\t\u0000 \u0000 151,784\t\u0000 325,000\t\u0000 \u0000 Joe\t\u0000 transfers\t\u0000 all\t\u0000 of\t\u0000 the\t\u0000 assets\t\u0000 and\t\u0000 liabilities\t\u0000 of\t\u0000 Cheap\t\u0000 Beach\t\u0000 Stuff\t\u0000 for\t\u0000 70%\t\u0000 of\t\u0000 the\t\u0000 common\t\u0000 stock\t\u0000 in\t\u0000 Sun\t\u0000 &\t\u0000 Fun.\t\u0000 \u0000 Guy\t\u0000 contributes\t\u0000 cash\t\u0000 of\t\u0000 $40,000,\t\u0000 inventory\t\u0000 worth\t\u0000 $56,205\t\u0000 (basis\t\u0000 of\t\u0000 $38,013)\t\u0000 and\t\u0000 provides\t\u0000 services\t\u0000 to\t\u0000 help\t\u0000 organize\t\u0000 the\t\u0000 corporation\t\u0000 worth\t\u0000 $10,000\t\u0000 for\t\u0000 the\t\u0000 remaining\t\u0000 30%\t\u0000 of\t\u0000 the\t\u0000 common\t\u0000 stock\t\u0000 in\t\u0000 Sun\t\u0000 &\t\u0000 Fun.\t\u0000 \u0000 General\t\u0000 Information\t\u0000 regarding\t\u0000 the\t\u0000 corporation\t\u0000 is\t\u0000 summarized\t\u0000 as\t\u0000 follows:\t\u0000 \u0000 The\t\u0000 business\t\u0000 address\t\u0000 is\t\u0000 350\t\u0000 Main\t\u0000 Street,\t\u0000 White\t\u0000 Sands,\t\u0000 Florida\t\u0000 The\t\u0000 employer\t\u0000 identification\t\u0000 number\t\u0000 is\t\u0000 75- 3392543;\t\u0000 the\t\u0000 principal\t\u0000 business\t\u0000 activity\t\u0000 code\t\u0000 is\t\u0000 339900.\t\u0000 Joe\t\u0000 is\t\u0000 president\t\u0000 of\t\u0000 the\t\u0000 company\t\u0000 and\t\u0000 Guy\t\u0000 is\t\u0000 the\t\u0000 secretary- treasurer.\t\u0000 Both\t\u0000 are\t\u0000 full- time\t\u0000 employess\t\u0000 of\t\u0000 the\t\u0000 corporation.\t\u0000 Joe's\t\u0000 compensation\t\u0000 is\t\u0000 $150,000\t\u0000 (SSN\t\u0000 123- 45- 6789).\t\u0000 Guy's\t\u0000 compensation\t\u0000 is\t\u0000 $90,000\t\u0000 (SSN\t\u0000 333- 22- 4444).\t\u0000 The\t\u0000 corporation\t\u0000 uses\t\u0000 the\t\u0000 accrual\t\u0000 method\t\u0000 of\t\u0000 accounting\t\u0000 and\t\u0000 reports\t\u0000 on\t\u0000 a\t\u0000 calendar\t\u0000 year\t\u0000 basis.\t\u0000 Inventory\t\u0000 has\t\u0000 been\t\u0000 consistently\t\u0000 valued\t\u0000 at\t\u0000 lower\t\u0000 of\t\u0000 cost\t\u0000 or\t\u0000 market\t\u0000 under\t\u0000 the\t\u0000 FIFO\t\u0000 method.\t\u0000 Inventory\t\u0000 capitalization\t\u0000 rules\t\u0000 of\t\u0000 IRC\t\u0000 section\t\u0000 263A\t\u0000 do\t\u0000 not\t\u0000 apply\t\u0000 due\t\u0000 to\t\u0000 the\t\u0000 \"small\t\u0000 business\t\u0000 exception\"\t\u0000 (average\t\u0000 annual\t\u0000 gross\t\u0000 receipts\t\u0000 for\t\u0000 the\t\u0000 three\t\u0000 preceding\t\u0000 taxable\t\u0000 years\t\u0000 do\t\u0000 not\t\u0000 exceed\t\u0000 $10\t\u0000 million).\t\u0000 The\t\u0000 corporation\t\u0000 was\t\u0000 not\t\u0000 a\t\u0000 grantor\t\u0000 to\t\u0000 a\t\u0000 foreign\t\u0000 trust,\t\u0000 nor\t\u0000 does\t\u0000 the\t\u0000 corporation\t\u0000 maintain\t\u0000 a\t\u0000 foreign\t\u0000 bank\t\u0000 account\t\u0000 or\t\u0000 foreign\t\u0000 security\t\u0000 account.\t\u0000 \u0000 No\t\u0000 net\t\u0000 operating\t\u0000 loss,\t\u0000 capital\t\u0000 loss,\t\u0000 general\t\u0000 business\t\u0000 credit,\t\u0000 prior\t\u0000 year\t\u0000 minimum\t\u0000 tax\t\u0000 credit,\t\u0000 or\t\u0000 other\t\u0000 carryovers\t\u0000 to\t\u0000 2012\t\u0000 exist.\t\u0000 \u0000 \u0000 \u0000 Detailed\t\u0000 information\t\u0000 regarding\t\u0000 some\t\u0000 of\t\u0000 Sun\t\u0000 &\t\u0000 Fun's\t\u0000 activities\t\u0000 and\t\u0000 transactions\t\u0000 during\t\u0000 the\t\u0000 year:\t\u0000 \u0000 1. Sun\t\u0000 &\t\u0000 Fun\t\u0000 purchased\t\u0000 some\t\u0000 new\t\u0000 manufacturing\t\u0000 equipment\t\u0000 (7- year- property)\t\u0000 that\t\u0000 cost\t\u0000 $13,580.\t\u0000 MACRS\t\u0000 on\t\u0000 all\t\u0000 other\t\u0000 existing\t\u0000 depreciable\t\u0000 assets\t\u0000 totaled\t\u0000 $69,163\t\u0000 for\t\u0000 2012.\t\u0000 \u0000 2. Sun\t\u0000 &\t\u0000 Fun\t\u0000 purchased\t\u0000 at\t\u0000 par\t\u0000 $50,000\t\u0000 of\t\u0000 Seabrook\t\u0000 Station\t\u0000 Utility\t\u0000 bonds.\t\u0000 Interest\t\u0000 of\t\u0000 $1,500\t\u0000 was\t\u0000 received\t\u0000 on\t\u0000 the\t\u0000 bonds\t\u0000 during\t\u0000 the\t\u0000 year.\t\u0000 \u0000 \u0000 3. Sun\t\u0000 &\t\u0000 Fun\t\u0000 sold\t\u0000 a\t\u0000 warehouse\t\u0000 for\t\u0000 $30,000.\t\u0000 The\t\u0000 consolidated\t\u0000 their\t\u0000 warehouse\t\u0000 activities\t\u0000 and\t\u0000 chose\t\u0000 not\t\u0000 to\t\u0000 replace\t\u0000 the\t\u0000 warehouse.\t\u0000 The\t\u0000 warehouse\t\u0000 cost\t\u0000 $40,000.\t\u0000 Accumulated\t\u0000 depreciation\t\u0000 for\t\u0000 book\t\u0000 purposes\t\u0000 was\t\u0000 $14,000.\t\u0000 Cost\t\u0000 recovery\t\u0000 for\t\u0000 tax\t\u0000 purposes\t\u0000 totaled\t\u0000 $7,179.\t\u0000 4. Sun\t\u0000 &\t\u0000 Fun\t\u0000 sold\t\u0000 machinery\t\u0000 for\t\u0000 $6,900.\t\u0000 The\t\u0000 machine\t\u0000 cost\t\u0000 $15,350.\t\u0000 Accumulated\t\u0000 depreciation\t\u0000 for\t\u0000 book\t\u0000 purposes\t\u0000 was\t\u0000 $7,246.\t\u0000 Cost\t\u0000 recovery\t\u0000 for\t\u0000 tax\t\u0000 purposes\t\u0000 totaled\t\u0000 $9,596.\t\u0000 \u0000 5. Sun\t\u0000 &\t\u0000 Fun\t\u0000 has\t\u0000 a\t\u0000 qualified\t\u0000 retirement\t\u0000 plan\t\u0000 which\t\u0000 covers\t\u0000 all\t\u0000 of\t\u0000 their\t\u0000 employees.\t\u0000 During\t\u0000 2012\t\u0000 they\t\u0000 made\t\u0000 total\t\u0000 contributions\t\u0000 of\t\u0000 $23,900\t\u0000 to\t\u0000 this\t\u0000 plan,\t\u0000 of\t\u0000 which\t\u0000 $10,000\t\u0000 was\t\u0000 for\t\u0000 Joe\t\u0000 and\t\u0000 Guy\t\u0000 ($5,000\t\u0000 each).\t\u0000 \u0000 6. Included\t\u0000 in\t\u0000 employee\t\u0000 benefits\t\u0000 expense\t\u0000 are\t\u0000 $532\t\u0000 and\t\u0000 $420\t\u0000 premiums\t\u0000 for\t\u0000 $50,000\t\u0000 (face\t\u0000 value)\t\u0000 group\t\u0000 term\t\u0000 life\t\u0000 insurance\t\u0000 for\t\u0000 Joe\t\u0000 and\t\u0000 Guy,\t\u0000 respectively.\t\u0000 Family\t\u0000 members\t\u0000 are\t\u0000 named\t\u0000 as\t\u0000 beneficiaries\t\u0000 in\t\u0000 the\t\u0000 policies.\t\u0000 \u0000 \u0000 7. The\t\u0000 key- man\t\u0000 life\t\u0000 insurance\t\u0000 provided\t\u0000 $500,000\t\u0000 coverage\t\u0000 on\t\u0000 Joe\t\u0000 and\t\u0000 Guy.\t\u0000 The\t\u0000 company\t\u0000 is\t\u0000 the\t\u0000 owner\t\u0000 and\t\u0000 the\t\u0000 beneficiary\t\u0000 of\t\u0000 the\t\u0000 policies.\t\u0000 \u0000 8. Contributions\t\u0000 for\t\u0000 the\t\u0000 year\t\u0000 included:\t\u0000 \u0000 \u0000 \u0000 a. World\t\u0000 Wildlife\t\u0000 Fund,\t\u0000 Inc.\t\u0000 ...................................29,963\t\u0000 b. American\t\u0000 National\t\u0000 Red\t\u0000 Cross...............................3,000\t\u0000 c. Woodbury\t\u0000 Church\t\u0000 Food\t\u0000 Pantry............................1,969\t\u0000 \u0000 9. An\t\u0000 analysis\t\u0000 of\t\u0000 the\t\u0000 Allowance\t\u0000 for\t\u0000 Doubtful\t\u0000 Accounts\t\u0000 reveals:\t\u0000 \u0000 Balance\t\u0000 -\t\u0000 December\t\u0000 31,\t\u0000 2011....................................$15,782\t\u0000 2012\t\u0000 Transactions\t\u0000 \u0000 Bad\t\u0000 Debt\t\u0000 Expense\t\u0000 ..............................................3,105\t\u0000 \u0000 Recovery\t\u0000 of\t\u0000 account\t\u0000 previously\t\u0000 written\t\u0000 off......1,200\t\u0000 \u0000 Accounts\t\u0000 written\t\u0000 off\t\u0000 as\t\u0000 uncollectible...............(4,756)\t\u0000 Balance\t\u0000 -\t\u0000 December\t\u0000 31,\t\u0000 2012......................................$15,331\t\u0000 10. Taxes\t\u0000 included:\t\u0000 \u0000 \u0000 Property\t\u0000 Taxes.........................21,244\t\u0000 Payroll\t\u0000 Taxes............................51,883\t\u0000 Other\t\u0000 Misc.\t\u0000 Taxes\t\u0000 ......................2,168\t\u0000 \u0000 \u0000 \u0000 \u0000 \u0000 \u0000 \u0000 \u0000 \u0000 11. Interest\t\u0000 expense\t\u0000 was\t\u0000 on\t\u0000 loans\t\u0000 for\t\u0000 the\t\u0000 following\t\u0000 purposes:\t\u0000 \u0000 \u0000 \u0000 \u0000 Purchase\t\u0000 of\t\u0000 buildings,\t\u0000 machinery\t\u0000 and\t\u0000 equipment......................77,779\t\u0000 Purchase\t\u0000 of\t\u0000 Seabrook\t\u0000 Station\t\u0000 Utility\t\u0000 Bonds..................................1,300\t\u0000 Cover\t\u0000 shortfall\t\u0000 in\t\u0000 working\t\u0000 capital..................................................3,798\t\u0000 12. Information\t\u0000 regarding\t\u0000 the\t\u0000 sale\t\u0000 of\t\u0000 investments\t\u0000 in\t\u0000 common\t\u0000 stock\t\u0000 during\t\u0000 the\t\u0000 year:\t\u0000 \u0000 \u0000 Asset\t\u0000 Acquired\t\u0000 Sold\t\u0000 Basis\t\u0000 Proceeds\t\u0000 \"A\"\t\u0000 Stock\t\u0000 (100\t\u0000 Shares)\t\u0000 2- 15- 06\t\u0000 8- 13- 12\t\u0000 5,000\t\u0000 7,085\t\u0000 \"B\"\t\u0000 Stock\t\u0000 (200\t\u0000 Shares)\t\u0000 3- 2- 12\t\u0000 7- 7- 12\t\u0000 12,295\t\u0000 8,300\t\u0000 \"C\"\t\u0000 Stock\t\u0000 (50\t\u0000 Shares)\t\u0000 1- 3- 07\t\u0000 12- 7- 12\t\u0000 10,000\t\u0000 8,320\t\u0000 **Note:\t\u0000 The\t\u0000 \"C\"\t\u0000 stock\t\u0000 was\t\u0000 sold\t\u0000 to\t\u0000 Joe\t\u0000 Mooney**\t\u0000 \u0000 13. Dividend\t\u0000 income\t\u0000 from\t\u0000 less\t\u0000 than\t\u0000 20%\t\u0000 investments\t\u0000 is\t\u0000 from\t\u0000 the\t\u0000 following\t\u0000 sources:\t\u0000 \u0000 \u0000 Plastics\t\u0000 Corporation\t\u0000 Common\t\u0000 Stock...........................................................4,244\t\u0000 International\t\u0000 Manufacturing\t\u0000 Corporation\t\u0000 Common\t\u0000 Stock........................2,731\t\u0000 Stow- n- Go\t\u0000 Corporation\t\u0000 preferred\t\u0000 stock......................................................3,798\t\u0000 \u0000 14. Sun\t\u0000 &\t\u0000 Fun\t\u0000 owns\t\u0000 30%\t\u0000 of\t\u0000 the\t\u0000 outstanding\t\u0000 common\t\u0000 stock\t\u0000 of\t\u0000 Hobby\t\u0000 Corporation.\t\u0000 During\t\u0000 2012\t\u0000 Hobby\t\u0000 reported\t\u0000 $1,000,000\t\u0000 of\t\u0000 income.\t\u0000 For\t\u0000 book\t\u0000 purposes\t\u0000 Sun\t\u0000 &\t\u0000 Fun\t\u0000 accounted\t\u0000 for\t\u0000 its\t\u0000 investment\t\u0000 in\t\u0000 Hobby\t\u0000 under\t\u0000 the\t\u0000 equity\t\u0000 method.\t\u0000 Hobby\t\u0000 Corporation\t\u0000 also\t\u0000 distributed\t\u0000 a\t\u0000 $100,000\t\u0000 dividend\t\u0000 to\t\u0000 Sun\t\u0000 &\t\u0000 Fun.\t\u0000 \u0000 15. Sun\t\u0000 &\t\u0000 Fun\t\u0000 distributed\t\u0000 cash\t\u0000 dividends\t\u0000 totaling\t\u0000 $160,000.\t\u0000 \u0000 16. Sun\t\u0000 &\t\u0000 Fun\t\u0000 Corporation\t\u0000 made\t\u0000 timely\t\u0000 estimated\t\u0000 federal\t\u0000 income\t\u0000 tax\t\u0000 payments\t\u0000 of\t\u0000 $130,000\t\u0000 to\t\u0000 the\t\u0000 U.S.\t\u0000 Treasury.\t\u0000 (Ignore\t\u0000 deferred\t\u0000 income\t\u0000 taxes\t\u0000 for\t\u0000 book\t\u0000 purposes.)\t\u0000 \u0000 17. Sun\t\u0000 &\t\u0000 Fun's\t\u0000 qualified\t\u0000 production\t\u0000 activities\t\u0000 income\t\u0000 (QPAI)\t\u0000 is\t\u0000 $200,000.\t\u0000 \u0000 18. After\t\u0000 taking\t\u0000 a\t\u0000 physical\t\u0000 count\t\u0000 of\t\u0000 inventory\t\u0000 at\t\u0000 December\t\u0000 31,\t\u0000 2012,\t\u0000 ending\t\u0000 inventory\t\u0000 was\t\u0000 computed\t\u0000 as\t\u0000 $641,774\t\u0000 \u0000 19. The\t\u0000 accumulated\t\u0000 E\t\u0000 &\t\u0000 P\t\u0000 balance\t\u0000 at\t\u0000 December\t\u0000 31,\t\u0000 2011\t\u0000 was\t\u0000 $520,960.\t\u0000 Depreciation\t\u0000 expense\t\u0000 computed\t\u0000 under\t\u0000 ADS\t\u0000 for\t\u0000 E&P\t\u0000 purposes\t\u0000 was\t\u0000 $40,000.\t\u0000 The\t\u0000 increase\t\u0000 in\t\u0000 the\t\u0000 cash\t\u0000 surrender\t\u0000 value\t\u0000 of\t\u0000 the\t\u0000 life\t\u0000 insurance\t\u0000 was\t\u0000 $374.\t\u0000 (Note:\t\u0000 Ignore\t\u0000 the\t\u0000 +/- \u0000 E&P\t\u0000 adjustment\t\u0000 for\t\u0000 differences\t\u0000 in\t\u0000 the\t\u0000 gain\t\u0000 (loss)\t\u0000 from\t\u0000 the\t\u0000 sale\t\u0000 of\t\u0000 business\t\u0000 properties.)\t\u0000 \u0000 \u0000 \u0000 Requirements:\t\u0000 \u0000 1. Compute\t\u0000 Joe\t\u0000 and\t\u0000 Guy's\t\u0000 initial\t\u0000 basis'\t\u0000 in\t\u0000 their\t\u0000 Sun\t\u0000 &\t\u0000 Fun\t\u0000 stock\t\u0000 on\t\u0000 June\t\u0000 6,\t\u0000 2001\t\u0000 when\t\u0000 they\t\u0000 formed\t\u0000 the\t\u0000 corporation.\t\u0000 Prepare\t\u0000 Sun\t\u0000 &\t\u0000 Fun's\t\u0000 initial\t\u0000 tax\t\u0000 basis\t\u0000 and\t\u0000 GAAP\t\u0000 basis\t\u0000 balance\t\u0000 sheet\t\u0000 as\t\u0000 of\t\u0000 June\t\u0000 6,\t\u0000 2001.\t\u0000 \u0000 \u0000 \u0000 \u0000 \u0000 \u0000 \u0000 2. Mr.\t\u0000 Mooney,\t\u0000 Sun\t\u0000 &\t\u0000 Fun's\t\u0000 President,\t\u0000 has\t\u0000 asked\t\u0000 you\t\u0000 to\t\u0000 prepare\t\u0000 Sun\t\u0000 &\t\u0000 Fun's\t\u0000 2012\t\u0000 corporate\t\u0000 tax\t\u0000 return.\t\u0000 Mr.\t\u0000 Mooney\t\u0000 has\t\u0000 asked\t\u0000 you\t\u0000 to\t\u0000 minimize\t\u0000 Sun\t\u0000 &\t\u0000 Fun's\t\u0000 taxable\t\u0000 Income\t\u0000 (ignore\t\u0000 any\t\u0000 AMT).\t\u0000 Round\t\u0000 your\t\u0000 computations\t\u0000 to\t\u0000 the\t\u0000 nearest\t\u0000 dollar.\t\u0000 Clearly\t\u0000 state\t\u0000 any\t\u0000 assumptions\t\u0000 made\t\u0000 in\t\u0000 completing\t\u0000 the\t\u0000 return.\t\u0000 Include\t\u0000 any\t\u0000 supporting\t\u0000 schedules\t\u0000 you\t\u0000 feel\t\u0000 are\t\u0000 necessary.\t\u0000 When\t\u0000 submitting\t\u0000 the\t\u0000 forms,\t\u0000 please\t\u0000 place\t\u0000 in\t\u0000 sequence\t\u0000 according\t\u0000 to\t\u0000 the\t\u0000 appropriate\t\u0000 order\t\u0000 (i.e.\t\u0000 ascending\t\u0000 sequence\t\u0000 number).\t\u0000 Place\t\u0000 all\t\u0000 supporting\t\u0000 schedules\t\u0000 after\t\u0000 the\t\u0000 forms\t\u0000 to\t\u0000 which\t\u0000 they\t\u0000 directly\t\u0000 relate,\t\u0000 making\t\u0000 sure\t\u0000 they\t\u0000 are\t\u0000 properly\t\u0000 referenced.\t\u0000 The\t\u0000 following\t\u0000 forms\t\u0000 (and\t\u0000 instructions)\t\u0000 are\t\u0000 available\t\u0000 via\t\u0000 the\t\u0000 link\t\u0000 in\t\u0000 Class\t\u0000 Content>Final\t\u0000 Project.\t\u0000 DO\t\u0000 NOT\t\u0000 prepare\t\u0000 the\t\u0000 return\t\u0000 with\t\u0000 commercial\t\u0000 tax\t\u0000 prep\t\u0000 software.\t\u0000 Form\t\u0000 1120:\t\u0000 US\t\u0000 Corporate\t\u0000 Income\t\u0000 Tax\t\u0000 Return\t\u0000 (and\t\u0000 accompanying\t\u0000 schedules\t\u0000 C,\t\u0000 K,\t\u0000 L,\t\u0000 M- 1,\t\u0000 and\t\u0000 M- 2)\t\u0000 Schedule\t\u0000 D\t\u0000 (Form\t\u0000 1120):\t\u0000 Capital\t\u0000 Gains\t\u0000 and\t\u0000 Losses\t\u0000 (ignore\t\u0000 Form\t\u0000 8949\t\u0000 -\t\u0000 Assume\t\u0000 Box\t\u0000 \"A\"\t\u0000 is\t\u0000 checked\t\u0000 for\t\u0000 the\t\u0000 sale\t\u0000 of\t\u0000 all\t\u0000 investments\t\u0000 in\t\u0000 common\t\u0000 stock)\t\u0000 Form\t\u0000 4562:\t\u0000 Depreciation\t\u0000 and\t\u0000 Amortization\t\u0000 Form\t\u0000 4797:\t\u0000 Sales\t\u0000 of\t\u0000 Business\t\u0000 Property\t\u0000 \u0000 Note:\t\u0000 For\t\u0000 Schedule\t\u0000 L\t\u0000 -\t\u0000 complete\t\u0000 the\t\u0000 ending\t\u0000 balance\t\u0000 sheet\t\u0000 ONLY\t\u0000 3. Include\t\u0000 a\t\u0000 memo\t\u0000 to\t\u0000 the\t\u0000 client\t\u0000 informing\t\u0000 them\t\u0000 of\t\u0000 the\t\u0000 following:\t\u0000 \u0000 \u0000 How\t\u0000 much\t\u0000 tax\t\u0000 they\t\u0000 owe\t\u0000 or\t\u0000 how\t\u0000 much\t\u0000 is\t\u0000 to\t\u0000 be\t\u0000 refunded\t\u0000 to\t\u0000 them.\t\u0000 Instructions\t\u0000 for\t\u0000 paying\t\u0000 estimated\t\u0000 taxes\t\u0000 for\t\u0000 the\t\u0000 2013\t\u0000 tax\t\u0000 year.\t\u0000 Any\t\u0000 carryforwards\t\u0000 they\t\u0000 may\t\u0000 have.\t\u0000 4. Prepare\t\u0000 the\t\u0000 GAAP\t\u0000 based\t\u0000 income\t\u0000 statement\t\u0000 for\t\u0000 the\t\u0000 year\t\u0000 ended\t\u0000 December\t\u0000 31,\t\u0000 2012\t\u0000 and\t\u0000 the\t\u0000 balance\t\u0000 sheet\t\u0000 as\t\u0000 of\t\u0000 December\t\u0000 31,\t\u0000 2012\t\u0000 for\t\u0000 Sun\t\u0000 &\t\u0000 Fun\t\u0000 Corporation.\t\u0000 Sun\t\u0000 &\t\u0000 Fun's\t\u0000 2012\t\u0000 adjusted\t\u0000 trial\t\u0000 balance\t\u0000 is\t\u0000 reported\t\u0000 in\t\u0000 the\t\u0000 Excel\t\u0000 spreadsheet.\t\u0000 \u0000 \u0000 5. Compute\t\u0000 Sun\t\u0000 &\t\u0000 Fun's\t\u0000 current\t\u0000 E&P\t\u0000 for\t\u0000 2012\t\u0000 and\t\u0000 the\t\u0000 accumulated\t\u0000 E&P\t\u0000 balance\t\u0000 at\t\u0000 December\t\u0000 31,\t\u0000 2012.\t\u0000 6. Compute\t\u0000 Joe\t\u0000 and\t\u0000 Guy's\t\u0000 basis'\t\u0000 in\t\u0000 their\t\u0000 Sun\t\u0000 &\t\u0000 Fun\t\u0000 stock\t\u0000 at\t\u0000 December\t\u0000 31,\t\u0000 2012.\t\u0000 Sun\t\u0000 and\t\u0000 Fun's\t\u0000 corporate\t\u0000 debt\t\u0000 increased\t\u0000 by\t\u0000 $63,000\t\u0000 during\t\u0000 2012.\t\u0000 Joe\t\u0000 and\t\u0000 Guy\t\u0000 did\t\u0000 not\t\u0000 make\t\u0000 any\t\u0000 additional\t\u0000 transfers/investments\t\u0000 in\t\u0000 Sun\t\u0000 &\t\u0000 Fun\t\u0000 over\t\u0000 the\t\u0000 period\t\u0000 2001- 2011.\t\u0000 The\t\u0000 tab\t\u0000 labeled\t\u0000 \"Profit_Loss\"\t\u0000 in\t\u0000 the\t\u0000 Excel\t\u0000 worksheet\t\u0000 summarizes\t\u0000 Sun\t\u0000 &\t\u0000 Fun's\t\u0000 accounting\t\u0000 net\t\u0000 income,\t\u0000 loss,\t\u0000 dividends\t\u0000 paid,\t\u0000 and\t\u0000 E&P\t\u0000 over\t\u0000 the\t\u0000 period\t\u0000 2001- 2011.\t\u0000 \u0000 7. What\t\u0000 amounts\t\u0000 will\t\u0000 Joe\t\u0000 and\t\u0000 Guy\t\u0000 report\t\u0000 on\t\u0000 their\t\u0000 individual\t\u0000 Form\t\u0000 1040's\t\u0000 related\t\u0000 to\t\u0000 Sun\t\u0000 &\t\u0000 Fun's\t\u0000 2012\t\u0000 activities?\t\u0000 \u0000 8. If\t\u0000 you\t\u0000 are\t\u0000 working\t\u0000 in\t\u0000 a\t\u0000 group,\t\u0000 each\t\u0000 person\t\u0000 in\t\u0000 that\t\u0000 group\t\u0000 will\t\u0000 need\t\u0000 to\t\u0000 submit\t\u0000 a\t\u0000 peer\t\u0000 evaluation\t\u0000 form.\t\u0000 The\t\u0000 form\t\u0000 can\t\u0000 be\t\u0000 found\t\u0000 on\t\u0000 the\t\u0000 Portal\t\u0000 in\t\u0000 Class\t\u0000 Content.\t\u0000 If\t\u0000 you\t\u0000 are\t\u0000 not\t\u0000 working\t\u0000 in\t\u0000 a\t\u0000 group,\t\u0000 the\t\u0000 form\t\u0000 is\t\u0000 unnecessary.\t\u0000 \u0000 \u0000 GOOD\t\u0000 LUCK!!!!!!!!!!\t\u0000 \u0000 \u0000