Question
S CORPORATION TAX RETURN PROBLEM Required: Using the information provided below, complete First Place Inc.'s (FPI) 2015 Form 1120S. Also complete Kate Kleiber's Schedule K-1.
S CORPORATION TAX RETURN PROBLEM
Required:
Using the information provided below, complete First Place Inc.'s (FPI) 2015 Form 1120S. Also complete Kate Kleiber's Schedule K-1.
Form 4562 for depreciation is not required. Include the amount of tax depreciation given in the problem on the appropriate line on the first page of Form 1120S.
If any information is missing, use reasonable assumptions to fill in the gaps.
The forms, schedules, and instructions can be found at the IRS Web site (www.irs.gov). The instructions can be helpful in completing the forms.
Facts:
First Place Inc. (FPI) was formed as a corporation on January 5, 2012, by its two owners Kate Kleiber and James Chandler. FPI immediately elected to be taxed as an S corporation for federal income tax purposes. FPI sells mountain climbing gear to retailers throughout the Rocky Mountain region. Kate owns 70 percent of the FPI common stock (the only class of stock outstanding) and James owns 30 percent.
FPI is located at 4200 West 400 North, Salt Lake City, Utah 84116.
FPI's Employer Identification Number is 87-5467544.
FPI's business activity is wholesale sales. Its business activity code is 423910.
Both shareholders work as employees of the corporation.
Kate is the president of FPI (Social Security number 312-89-4567). Kate's address is 1842 East 8400 South, Sandy, Utah 84094.
James is the vice president of FPI (Social Security number 321-98-7645). James's address is 2002 East 8145 South, Sandy, Utah 84094.
FPI uses the accrual method of accounting and has a calendar year-end.
Page C-11
The following is FPI's 2015 income statement:
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