Rainbow Corporation, an S corporation, uses the calendar year as its tax year. Bentley, Abby, and Clayton own 30, 60, and 10 shares, respectively, of the Rainbow stock. Clayton's basis for his stock is $50,000 on January 1 of the current year (assume a non-leap year). On June 30, Abby gifted one-half of her stock to Mickey. On November 30, Clayton sold his stock to Mickey for $70,000. Rainbow reports the following results for the current year: E (Click the icon to view the results.) Read the requirements. Requirement a. What amount of income, loss, or deduction do the four shareholders report (assuming the corporation makes no special allocation election)? (Enter all amounts as positive numbers. Use a 365-day year for computations. Do not round intermediary calculations. Only round the amount you enter into the input field to the nearest dollar.) Allocation to Shareholder Bentley Abby Clayton Mickey Total Data table Ordinary income Long-term capital loss Charitable contributions Ordinary income 110,000 Long-term capital loss 14.000 - X Charitable contributions 7,000 Requirements a. What amount of income, loss, or deduction do the four shareholders report (assuming the corporation makes no special allocation election)? b. What gain or loss does Clayton recognize when he sells the Rainbow stock? Help me solve Print Done er
Rainbow Corporation, an S corporation, uses the calendar year as its tax year. Bentley, Abby, and Clayton own 30, 60, and 10 shares, respectively, of the Rainbow stock. Clayton's basis for his stock is $50,000 on January 1 of the current year (assume a non-leap year). On June 30, Abby gifted one-half of her stock to Mickey. On November 30, Clayton sold his stock to Mickey for $70,000. Rainbow reports the following results for the current year: E (Click the icon to view the results.) Read the requirements. Requirement a. What amount of income, loss, or deduction do the four shareholders report (assuming the corporation makes no special allocation election)? (Enter all amounts as positive numbers. Use a 365-day year for computations. Do not round intermediary calculations. Only round the amount you enter into the input field to the nearest dollar.) Allocation to Shareholder Bentley Abby Clayton Mickey Total Data table Ordinary income Long-term capital loss Charitable contributions Ordinary income 110,000 Long-term capital loss 14.000 - X Charitable contributions 7,000 Requirements a. What amount of income, loss, or deduction do the four shareholders report (assuming the corporation makes no special allocation election)? b. What gain or loss does Clayton recognize when he sells the Rainbow stock? Help me solve Print Done er
Chapter5: Introduction To Business Expenses
Section: Chapter Questions
Problem 30P
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Question
1
Transcribed Image Text:Rainbow Corporation, an S corporation, uses the calendar year as its tax year. Bentley, Abby, and Clayton own 30, 60, and 10 shares, respectively, of the Rainbow stock. Clayton's basis for his stock is $50,000 on
January 1 of the current year (assume a non-leap year). On June 30, Abby gifted one-half of her stock to Mickey. On November 30, Clayton sold his stock to Mickey for $70,000. Rainbow reports the following
results for the current year:
E (Click the icon to view the results.)
Read the requirements.
Requirement a. What amount of income, loss, or deduction do the four shareholders report (assuming the corporation makes no special allocation election)? (Enter all amounts as positive numbers, Use a 365-day
year for computations. Do not round intermediary calculations. Only round the amount you enter into the input field to the nearest dollar.)
Allocation to Shareholder
Bentley
Abby
Clayton
Mickey
Total
Data table
Ordinary income
Long-term capital loss
Charitable contributions
Ordinary income
110,000
Long-term capital loss
14,000
Charitable contributions
7,000
Requirements
Help me solve
a. What amount of income, loss, or deduction do the four shareholders report
(assuming the corporation makes no special allocation election)?
er
Print
Done
b. What gain or loss does Clayton recognize when he sells the Rainbow stock?
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ISBN:
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Author:
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Publisher:
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