TAX RETURN PROJECT #1: Bucco Corp (BC) BC is a calendar-year, publicly traded C Corporation. (in a parallel US universe - where some forms are not required) FORMS REQUIRED: You must download 2019 forms from irs.gov, (COMPLETE BY HAND: Neat, organized and professional appearance.) 2019 Form 1120, complete page 1, page 2 and Schedule M-1 on page 6 Form 1120 Schedule D Form 4797 SUPPLEMENTAL WORKSHEETS REQUIRED: (These are not IRS forms, but you presenting your calculations. Excel is encouraged where possible. Simply print your Excel work and include.) Calculation of Book and Taxable income, with Book-Tax Differences Identified (T or P) The Tax Provision Reconciliation The calculation of gains, losses, any limited deductions and carryovers Prepare the journal entry to record the tax liability from this tax return. CEO Compensation Bonus Plan, which follows BC ACTIVITY during 2019: Gross Sales = $38,000,000 $200,500 of dividends received from Alpha Corp (BC owns 50% of Alpha Corp) $25,000 of dividends received from Beta Corp (BC owns 5% of Beta Corp) Total Interest Income = $32,500, includes bank and municipal bond interest (the amount of the municipal bond interest is $1,000 Sold an investment in Charlie Corp for $4,500, purchased 10 years ago for $45,000 Sold Equipment $170,000. BC purchased the equipment several years ago for $150,000, claiming $80,000 for book and tax depreciation (2019's already included in depreciation expense deduction) Salaries Expense: O CEO received a salary of $1 million and a cash bonus $2,500,000 BC employs 100 individuals. Their total compensation for the year is $2,500,000 Rent Expense = $2,050,000 Depreciation expense = $10,000 Misc Expenses = $4,500,000 Donated $150,000 cash to qualified charities Last year, BC: O of their total charitable contributions, $800,000 was not tax deductible. O For their property transactions, BC incurred a net Section 1231 loss of $12,500. Hint: Ask yourself - what should you include in book income from that stock sale? In tax income? What should you report in book from the sale of the equipment? For tax? But how does the prior year 1231 loss affect your reporting? We did a faux quiz, filling out tax forms. Go back and look at those. Look at the property workbook and quizzes. For the CEO's comp, ask yourself - what are we allowed to deduct for tax? Does that have any influence on our book deduction? Take the time to think about your work and you will avoid this sloppy mistakes. TAX RETURN PROJECT #1: Bucco Corp (BC) BC is a calendar-year, publicly traded C Corporation. (in a parallel US universe - where some forms are not required) FORMS REQUIRED: You must download 2019 forms from irs.gov, (COMPLETE BY HAND: Neat, organized and professional appearance.) 2019 Form 1120, complete page 1, page 2 and Schedule M-1 on page 6 Form 1120 Schedule D Form 4797 SUPPLEMENTAL WORKSHEETS REQUIRED: (These are not IRS forms, but you presenting your calculations. Excel is encouraged where possible. Simply print your Excel work and include.) Calculation of Book and Taxable income, with Book-Tax Differences Identified (T or P) The Tax Provision Reconciliation The calculation of gains, losses, any limited deductions and carryovers Prepare the journal entry to record the tax liability from this tax return. CEO Compensation Bonus Plan, which follows BC ACTIVITY during 2019: Gross Sales = $38,000,000 $200,500 of dividends received from Alpha Corp (BC owns 50% of Alpha Corp) $25,000 of dividends received from Beta Corp (BC owns 5% of Beta Corp) Total Interest Income = $32,500, includes bank and municipal bond interest (the amount of the municipal bond interest is $1,000 Sold an investment in Charlie Corp for $4,500, purchased 10 years ago for $45,000 Sold Equipment $170,000. BC purchased the equipment several years ago for $150,000, claiming $80,000 for book and tax depreciation (2019's already included in depreciation expense deduction) Salaries Expense: O CEO received a salary of $1 million and a cash bonus $2,500,000 BC employs 100 individuals. Their total compensation for the year is $2,500,000 Rent Expense = $2,050,000 Depreciation expense = $10,000 Misc Expenses = $4,500,000 Donated $150,000 cash to qualified charities Last year, BC: O of their total charitable contributions, $800,000 was not tax deductible. O For their property transactions, BC incurred a net Section 1231 loss of $12,500. Hint: Ask yourself - what should you include in book income from that stock sale? In tax income? What should you report in book from the sale of the equipment? For tax? But how does the prior year 1231 loss affect your reporting? We did a faux quiz, filling out tax forms. Go back and look at those. Look at the property workbook and quizzes. For the CEO's comp, ask yourself - what are we allowed to deduct for tax? Does that have any influence on our book deduction? Take the time to think about your work and you will avoid this sloppy mistakes