Required information [The following information applies to the questions displayed below.] 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. Falcons Corporation (an S Corporation) Income Statement December 31, Year 1 and Year 2 Sales revenue Cost of goods sold Salary to owners Julio and Milania Employee wages Depreciation expense Section 179 expense Interest income (related to business income) Municipal bond income Government fines Overall net income Distributions Year 1 $ 320,000 (41,000) Year 2 $ 450,000 (62,000) (40,000) (80,000) (25,000) (50,000) (17,000) (34,000) (30,000) (50,000) 12,000 1,600 0 $ 180,600 22,500 4,200 (2,000) $ 198,700 $ 30,000 $ 50,000 a. What amount of ordinary income and separately stated items are allocated to them for year 1 based on the information above? Assume that Falcons Corporation has $210,000 of qualified property (unadjusted basis). Ordinary Income Section 179 expense Qualified business income Amount Allocated to Julio Allocated to Milania 30,000 Municipal bond income 1,600 Unadjusted basis of qualified property $ 210,000 $ Distributions $ 30,000 $ 800 105,000 $ 15,000 $ 800 105,000 15,000