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 $14,000 from Falcons Corporation. Falcons Corporation (an S Corporation) Income Statement December 31, Year 1 and Year 2 Sales revenue Year 1 $ 330,000 Year 2 $ 460,000 Cost of goods sold Salary to owners Julio and Milania Employee wages (42,000) (65,000) (40,000) (80,000) (30,000) (60,000) Depreciation expense Section 179 expense Interest income (related to business income) Municipal bond income (20,000) (40,000) (30,000) (50,000) 10,000 Government fines Overall net income Distributions 1,300 0 $ 179,300 18,500 3,600 (3,000) $ 184,100 $ 28,000 $ 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 $230,000 of qualified property (unadjusted basis). Ordinary Income Distributions Section 179 expense Municipal bond income Amount Allocated to Allocated to Julio Milania $ 85,950 $ 85,950 28,000 30,000 45,000 30,000 1,300 Qualified business income Allocated wages $ (40,000) Unadjusted basis of qualified property
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 $14,000 from Falcons Corporation. Falcons Corporation (an S Corporation) Income Statement December 31, Year 1 and Year 2 Sales revenue Year 1 $ 330,000 Year 2 $ 460,000 Cost of goods sold Salary to owners Julio and Milania Employee wages (42,000) (65,000) (40,000) (80,000) (30,000) (60,000) Depreciation expense Section 179 expense Interest income (related to business income) Municipal bond income (20,000) (40,000) (30,000) (50,000) 10,000 Government fines Overall net income Distributions 1,300 0 $ 179,300 18,500 3,600 (3,000) $ 184,100 $ 28,000 $ 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 $230,000 of qualified property (unadjusted basis). Ordinary Income Distributions Section 179 expense Municipal bond income Amount Allocated to Allocated to Julio Milania $ 85,950 $ 85,950 28,000 30,000 45,000 30,000 1,300 Qualified business income Allocated wages $ (40,000) Unadjusted basis of qualified property
SWFT Essntl Tax Individ/Bus Entities 2020
23rd Edition
ISBN:9780357391266
Author:Nellen
Publisher:Nellen
Chapter18: Comparative Forms Of Doing Business
Section: Chapter Questions
Problem 16P
Related questions
Question
Denger
![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 $14,000 from Falcons Corporation.
Falcons Corporation (an S Corporation)
Income Statement
December 31, Year 1 and Year 2
Sales revenue
Year 1
$ 330,000
Year 2
$ 460,000
Cost of goods sold
Salary to owners Julio and Milania
Employee wages
(42,000)
(65,000)
(40,000)
(80,000)
(30,000)
(60,000)
Depreciation expense
Section 179 expense
Interest income (related to business income)
Municipal bond income
(20,000)
(40,000)
(30,000)
(50,000)
10,000
Government fines
Overall net income
Distributions
1,300
0
$ 179,300
18,500
3,600
(3,000)
$ 184,100
$ 28,000
$ 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 $230,000 of qualified property (unadjusted basis).
Ordinary Income
Distributions
Section 179 expense
Municipal bond income
Amount
Allocated to Allocated to
Julio
Milania
$
85,950 $
85,950
28,000
30,000
45,000
30,000
1,300
Qualified business income
Allocated wages
$ (40,000)
Unadjusted basis of qualified property](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F07a796d3-deb6-4061-8bcc-1e56a64b1a55%2F6aeda376-6d00-4739-b83a-ae2353710db9%2Fevgzy8r_processed.jpeg&w=3840&q=75)
Transcribed Image Text: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 $14,000 from Falcons Corporation.
Falcons Corporation (an S Corporation)
Income Statement
December 31, Year 1 and Year 2
Sales revenue
Year 1
$ 330,000
Year 2
$ 460,000
Cost of goods sold
Salary to owners Julio and Milania
Employee wages
(42,000)
(65,000)
(40,000)
(80,000)
(30,000)
(60,000)
Depreciation expense
Section 179 expense
Interest income (related to business income)
Municipal bond income
(20,000)
(40,000)
(30,000)
(50,000)
10,000
Government fines
Overall net income
Distributions
1,300
0
$ 179,300
18,500
3,600
(3,000)
$ 184,100
$ 28,000
$ 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 $230,000 of qualified property (unadjusted basis).
Ordinary Income
Distributions
Section 179 expense
Municipal bond income
Amount
Allocated to Allocated to
Julio
Milania
$
85,950 $
85,950
28,000
30,000
45,000
30,000
1,300
Qualified business income
Allocated wages
$ (40,000)
Unadjusted basis of qualified property
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
Recommended textbooks for you