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. Sales revenue Cost of goods sold Salary to owners Julio and Milania Employee wages Falcons Corporation (an S Corporation) Income Statement December 31, Year 1 and Year 2 Depreciation expense Section 179 expense Interest income (related to business income) Municipal bond income Government fines Overall net income Distributions Ordinary Income Amount Year 1 $ 315,000 (41,000) (40,000) (25,000) Allocated to Julio (17,000) (30,000) 10,000 1,300 0 $ 173,300 $ 28,000 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 $210,000 of qualified property (unadjusted basis). Year 2 $ 445,000 (62,000) (80,000) | (50,000) (34,000) | Allocated to Milania (50,000) 18,500 | 3,600 (2,000) | $ 189,100 $ 50,000
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. Sales revenue Cost of goods sold Salary to owners Julio and Milania Employee wages Falcons Corporation (an S Corporation) Income Statement December 31, Year 1 and Year 2 Depreciation expense Section 179 expense Interest income (related to business income) Municipal bond income Government fines Overall net income Distributions Ordinary Income Amount Year 1 $ 315,000 (41,000) (40,000) (25,000) Allocated to Julio (17,000) (30,000) 10,000 1,300 0 $ 173,300 $ 28,000 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 $210,000 of qualified property (unadjusted basis). Year 2 $ 445,000 (62,000) (80,000) | (50,000) (34,000) | Allocated to Milania (50,000) 18,500 | 3,600 (2,000) | $ 189,100 $ 50,000
Chapter28: Income Taxati On Of Trusts And Estates
Section: Chapter Questions
Problem 8DQ
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