Required:

Please complete the 2022 Federal income tax return for Fun Fair of Ventura, Inc. based upon the facts presented below. If required information is missing, use reasonable assumptions to fill in the gaps. Include an Assumption and Calculations page at the end of the return. Turn this assignment in as a single pdf on Canvas. Hint: use Schedule M-3 instead of Schedule M-1.

Facts:

Fun Fair of Ventura, Inc. (FF) is organized as a corporation and is taxed as a C corporation with a calendar year-end. FF owns and operates an amusement park in Oxnard, California. Oxnards weather allows FF to operate year-round. FFs address, employer identification number (EIN), and date of incorporation are as follows:

Fun Fair of Ventura, Inc. 50 Boardwalk Oxnard, California 93030 EIN: 36-4385943

Date Incorporated: July 23, 2004 FF has been at the same address since inception. FF has only common shares issued (no preferred stock).

FF is owned by 86 shareholders. The majority owner of FF is a large private equity firm based in San Jose, California called Amusement Ventures, LLC (AV). AVs address, employer identification, and other information are as follows:

Amusement Ventures, LLC 675 Shady Wood Boulevard San Jose, California 95101 EIN: 54-8293213

AV is taxed as a partnership for federal tax purposes. AV is organized in California. It owns 30% of the voting stock of FF directly. No other person or entity owns directly 20% or more, or owns, directly or indirectly, more than 50% of the voting stock of FF.

FF uses the accrual method of accounting. FF is not a subsidiary nor is it in an affiliated group with any other entity. FF is not audited by a CPA firm. It does, however, use GAAP-based financial statements. FF has never had a restatement of its income statement.

FF reported the following information for 2022:

FF did not pay dividends in excess of its current and accumulated earnings and profits.

None of the stock of FF is owned by non-U.S. persons

FF has never issued publicly offered debt instruments.

FF is not required to file a Schedule UTP, Uncertain Tax Position Statement.

FF made payments that required it to file federal Form(s) 1099. These Forms 1099 were filed timely by FF.

FFs average annual gross receipts for the prior three years are under $26,000,000.

None of the shareholders of FF changed during the year.

FF has never disposed of more than 65% (by value) of its assets in a taxable, non-taxable,

or tax deferred transaction.

FF did not receive any assets in a Section 351 transfer during the year.

FF elects to file a complete Schedule M-3 even if only M-1, or a partial M-3, is required.

Additional information:

On August 1, 2022 FF was notified by its legal counsel that FF was being sued by a former employee regarding her termination of employment from FF. On December 21, 2022, a legal settlement was reached with this terminated employee. As part of the settlement, FF agreed to pay the employee a settlement amount of $190,000 on January 10, 2023. FF accrued this expense on its 2022 financial statements.

FF maintains a portfolio of tax-exempt securities (none of which is a private activity bond) and publicly traded stocks as a measure to provide immediate liquidity if needed (none of these investments is debt financed). All of these securities originate from less than 20% owned domestic corporations.

FF owns 12% of Fun Fair of Russia (FFR), a Russian corporation operating a theme park on the outskirts of Moscow. FFR remitted dividends to FF of $14,000. FF also received $300 in dividends from holding marketable securities on occasion (all less than 20% owned by FF).

From inception until this year the Rapid Coaster had been FFs main attraction, but as it aged it has lost some appeal. To attract new customers, FF purchased a new attraction known as the Vomitnator. The Vomitnator was installed and rendered operational on March 1, 2022 at a cost of $6,000,000 to acquire, install, and make ready for service.

FFs regular tax depreciation for the year is correctly calculated as $1,112,499 before considering the 2022 addition of the Vomitnator. FF wants to claim the maximum allowable deduction for the Vominator in 2022. Because of the Vominators modular design, it is considered personal (as opposed to real) property.

FF officer information for the year is as follows (compensation amounts included in total wages on the income statement for all employees):

Name	Social Security number	Percent of time Devoted to business	Percent of Stock Owned	Amount of compensation
Marissa Hunt	435-54-2342	100%	.05%	$235,000
Dakon Williams	243-98-3242	100%	.03%	$195,000
Deon Johnson	194-23-7435	100%	0%	$165,000
Jennifer Conley	623-53-3920	100%	0%	$150,000

Near the end of the year, FF switched its property and casualty insurance company. As a result, the plan year for its insurance contract was altered. On December 31, 2022 FF prepaid insurance premiums of $25,000 representing coverage through February 15, 2023 as a condition of being accepted by the new company. FF did not expense any of the prepayment for financial accounting purposes.

FF rents from vendors several pieces of equipment to use in its business. As of December 31, 2021 and December 31, 2022, respectively, FF had prepaid vendors for equipment rental of $30,000 for January 2022 and $35,000 for January 2023.

On December 26, 2022 FF prepaid a contractor $17,500 to repair several pieces of maintenance shop equipment in January of 2023. FF fully expects that the contractor will have completed the project by January 31, 2022.

All the accrued wages and bonus amounts on the financial statements as of December 31, 2021 were paid on February 28, 2022.

As of December 31, 2021 and 2022, respectively, FF had vacation accruals on its books of $29,000 and $35,000. As of March 15, 2022 and 2023, respectively, FF had paid $5,000 and $8,000 of those accrued amounts.

On December 2, 2022, the millionth customer entered the park. To recognize the accomplishment and to promote the amusement park through print and radio media advertisements, FF held a give-away contest wherein the lucky customer deemed to be the millionth customer would be given $100,000. The check was presented to the lucky winner on January 15, 2023.