Julio and Milania are owners of Falcons Corporation, an S corporation. Each owns 50 percent of Falcons Corporatic year 1, Julio and Milania each received distributions of $10,000 from Falcons Corporation. Falcons Corporation (an s corporation) Income Statement December 31, Year 1 and Year 2 Year 1 Year 2 $ 320,000 (41,000) (40,000) (30,000) (17,000) $ 450,000 (62,000) (80,000) (60,000) (34,000) (50,000) 18,500 Sales revenue Cost of goods sold Salary to owners Julio and Milania Employee wages Depreciation expense Section 179 expense Interest income (related to business income) Municipal bond income (30,000) 10,000 1,700 4,400 (2,000) $ 184,900 Government fines Overall net income $ 173,700 Distributions $ 20,000 $ 50,000 a. What amount of ordinary income and separately stated items are allocated to them for year 1 based on the information Assume that Falcons Corporation has $220,000 of qualified property (unadjusted basis). Allocated to Allocated to Amount Julio Milania Ordinary Income Section 179 expense Qualified business income Municipal bond income Distributions Allocated wages Unadjusted basis of qualified property
Julio and Milania are owners of Falcons Corporation, an S corporation. Each owns 50 percent of Falcons Corporatic year 1, Julio and Milania each received distributions of $10,000 from Falcons Corporation. Falcons Corporation (an s corporation) Income Statement December 31, Year 1 and Year 2 Year 1 Year 2 $ 320,000 (41,000) (40,000) (30,000) (17,000) $ 450,000 (62,000) (80,000) (60,000) (34,000) (50,000) 18,500 Sales revenue Cost of goods sold Salary to owners Julio and Milania Employee wages Depreciation expense Section 179 expense Interest income (related to business income) Municipal bond income (30,000) 10,000 1,700 4,400 (2,000) $ 184,900 Government fines Overall net income $ 173,700 Distributions $ 20,000 $ 50,000 a. What amount of ordinary income and separately stated items are allocated to them for year 1 based on the information Assume that Falcons Corporation has $220,000 of qualified property (unadjusted basis). Allocated to Allocated to Amount Julio Milania Ordinary Income Section 179 expense Qualified business income Municipal bond income Distributions Allocated wages Unadjusted basis of qualified property
Chapter9: Acquisitions Of Property
Section: Chapter Questions
Problem 30P
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Transcribed Image Text: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 $10,000 from Falcons Corporation.
Falcons Corporation (an s Corporation)
Income Statement
December 31, Year 1 and Year 2
Year 1
$ 320,000
(41,000)
(40,000)
(30,000)
(17,000)
(30,000)
10,000
Year 2
$ 450,000
(62,000)
(80,000)
(60,000)
(34,000)
(50,000)
18,500
Sales revenue
Cost of goods sold
Salary to owners Julio and Milania
Employee wages
Depreciation expense
Section 179 expense
Interest income (related to business income)
Municipal bond income
Government fines
1,700
4,400
(2,000)
$ 173,700
$ 184,900
Overall net income
$ 20,000
$ 50,000
Distributions
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 $220,000 of qualified property (unadjusted basis).
Allocated to
Julio
Allocated to
Amount
Milania
Ordinary Income
Section 179 expense
Qualified business income
Municipal bond income
Distributions
Allocated wages
Unadjusted basis of qualified property
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The top picture was helpful for the separately stated items and I got most of the numbers on my own, but how do you calculate the QBI and allocated wages for this problem?
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