this is the information to fill out a 2016 IRS FORM 1120:

Link for form:

https://www.irs.gov/pub/irs-pdf/f1120.pdf

Corporation (Form 1120) Spring 2017

Michael Fox, Rachel Allen, and Hannah Rowland are owners in FAR, Inc. a corporation engaged in commercial office design services. Pertinent information regarding FAR, Inc. is summarized below.

Social security numbers are as follows; Michael 623-98-0123; Rachel 410-63-4297; and Hannah 855-21-1750. Michael is the President of the company.

The address of the company is 2835 Lake View Drive, Charlotte, NC 28130.

The company was formed and began operations on January 1, 2012.

The business code is 541400.

The federal identification number is 67-1234598

The corporation uses the cash method of accounting and the calendar year for reporting.

The corporation purchased a new office computer system on December 12, 2016. They desire to expense this asset under 179 for tax purposes. The company uses straight-line depreciation for financial reporting and recorded a total of $9,002 depreciation for book purposes (which includes depreciation on the new computer system). The company uses MACRS for its machinery and equipment and recorded $14,602 in depreciation for its other fixed assets (using MACRS). Assume none of the depreciation creates a tax preference or adjustment for AMT purposes.

All loan borrowings were used exclusively for acquisition of equipment, consequently, all interest is considered business interest.

In 2016, compensation of $80,000 was paid to Fox. Allen and Rowland each received compensation of $40,000.

Dividends were paid to owners as follows:Fox - $60,000; Allen - $36,000; Rowland - $24,000. There was no distribution of any non-cash property.

The equipment loan is nonrecourse debt to the shareholders.

All initial equity contributions and additional paid-in capital were contributed by shareholders according to their ownership share which is as follows: Fox 50%; Allen 30%; Rowland 20%.

None of the stockholders sold any portion of their ownership interests during the year.

The company has no available tax credits and is not subject to AMT. The companys operations are entirely limited to the geographic areas of North Carolina, Georgia, and South Carolina. All shareholders are U.S. citizens. The corporation had no foreign operations, no foreign bank accounts, and no interest in any foreign trusts or foreign corporations. The companys stock is not publicly traded.

The corporation is not subject to the consolidated audit procedures. The company files its federal tax return in Cincinnati, Ohio.

Michael Fox lives at 415 Knight Ct., Charlotte, NC 28215, Rachel Allen lives at 692 Radford Dr., Concord, NC 28025; and Hannah Rowland lives at 342 Coastal Rd., Charlotte, NC 28230.

No ownership changes occurred during the year.

The companys marketable securities represent small investments (<1%) in a number of publicly traded companies and mutual funds. It sold its holdings of ABC common stock (carried as Marketable Securities on the balance sheet) on May 20 for $9,000. The corporation purchased this investment several years ago for $15,000.

The current income statement for the corporation reflected book net income of $137,100 AFTER book depreciation has been taken on the equipment AND after the loss on the sale of ABC common stock was recorded. The following information was taken from the corporations financial records for the current year.

Cash Receipts:

Service fees collected $823,000

Taxable qualified dividend income 6,600

Taxable investment interest income 2,400

Tax exempt interest 1,600

Proceeds from sale of ABC Fund $ 9,000

Total Receipts $842,600

Cash Disbursements:

Compensation to shareholders $160,000

Customer Refunds 5,000

Office Rent 29,000

Federal income tax payments ($12.5K/quarter) 50,000

Utilities 7,498

Employee salaries 320,000

Business & Professional Licenses 3,000

Cash Contribution to United Way 1,000

Meals & Entertainment (100%) 2,200

Travel 6,000

Office supplies & expense 10,400

Accounting (Professional) fees 11,000

Advertising 18,000

Payroll taxes 48,600

Business interest (on equipment loan) 1,600

General Liability Insurance Expense 3,200

Principal payments on equipment loan 12,000

Purchase of new office computer system 17,000

Dividend payments to owners 120,000

Equipment rentals 5,000

Total Disbursements 830,498

Journal entries have been made to record regular (book) depreciation in the amount of $9,002.

The balance sheets for the corporation were as follows for the current year:

Account January 1, 2016 December 31, 2016

Cash $ 95,761 $ ?

Tax-exempt securities (at cost) 32,000 32,000

Marketable Securities (at cost) 125,000 110,000

Machinery & equipment 85,000 ?

Accumulated depreciation ( 36,761) ________?

Total assets $ 301,000 $ ?

Nonrecourse equipment loan $ 35,000 $ ?

Common Stock $ 40,000 $ 40,000

Additional Paid-in Capital $ 160,000 $ 160,000

Retained Earnings $ 66,000 $ ?

Total liabilities and capital $ 301,000 $ ?

REQUIRED: 1. Prepare a 2016 Form 1120 for the corporation. (Do NOT prepare a state return). Attach supporting schedules as necessary if adequate information is provided. 2. Include a depreciation schedule, Form 4562 and Schedule D.