[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. Inyear 1, Julio and Milania each received distributions of $10,000 from Falcons Corporation.Sales revenueCost of goods soldSalary to owners Julio and MilaniaEmployee wagesDepreciation expenseSection 179 expenseFalcons Corporation (an S Corporation)Income StatementDecember 31, Year 1 and Year 2Interest income (related to business income)Municipal bond income.Government finesOverall net income.DistributionsShow Transcribed TextOrdinary IncomeSection 179 expensea. 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 $200,000 of qualified property (unadjusted basis).Municipal bond incomeUnadjusted basis of qualified propertyAllocated wagesDistributionsQualified business incomea. 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 $200,000 of qualified property (unadjusted basis).AmountAllocated toJulio30,0001,700200,000$ 65,000 $$20,000 $Year 1$ 305,000(43,000)(40,000)(25,000)(15,000)(30,000)10,0001,700015,000850$ 163,700$ 20,000100.000Allocated toMilania32,500 $10,000 $Year 2$ 435,000(63,000)(80,000)(50,000)(30,000)(50,000)18,5004,400(2,000)$ 182,900$ 50,00015,000850100,00032,50010,000

Ordinary income refers to the regular and recurring income that a taxpayer receives from their…

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 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 Overall net income Distributions Year 1 $ 305,000 (43,000) (40,000) (25,000) (15,000) (30,000) 10,000 1,700 0 $ 163,700 $ 20,000 Year 2 $ 435,000 (63,000) (80,000) (50,000) (30,000) (50,000) 18,500 4,400 (2,000) $ 182,900 $ 50,000

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 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 Overall net income Distributions Year 1 $ 305,000 (43,000) (40,000) (25,000) (15,000) (30,000) 10,000 1,700 0 $ 163,700 $ 20,000 Year 2 $ 435,000 (63,000) (80,000) (50,000) (30,000) (50,000) 18,500 4,400 (2,000) $ 182,900 $ 50,000

SWFT Corp Partner Estates Trusts

42nd Edition

ISBN:9780357161548

Author:Raabe

Publisher:Raabe

Chapter10: Partnerships: Formation, Operation, And Basis

Section: Chapter Questions

Problem 36P

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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 $12,000 from Falcons Corporation. Sales revenue Cost of goods sold Falcons Corporation (an S Corporation) Income Statement December 31, Year 1 and Year 2 Salary to owners Julio and Milania Employee wages 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 $ 335,000 (42,000) (40,000) (30,000) (20,000) (30,000) 12,000 1,808 Allocated to Julio 0 $ 186,800 $ 24,000 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 $240,000 of qualified property (unadjusted basis). Year 2 $ 465,000…
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Julio and Milania are owners of Falcons Corporation, an S corporation. They each own 50 percent of Falcons Corporation. In year 2, Julio and Milania each received distributions of $25,000 from Falcons Corporation. Sales revenue Cost of goods sold Falcons Corporation (an S Corporation) Income Statement December 31, Year 1 and Year 2 Salary to owners Julio and Milania Employee wages Depreciation expense Section 179 expense Interest income. Municipal bond income Government fines Overall net income Distributions Ordinary Income Year 1 Year 2 $300,000 $430,000 (40,000) (60,000) (40,000) (80,000) (50,000) (25,000) (20,000) (40,000) (30,000) (50,000) 12,000 22,500 1,500 0 Amount a. What amount of ordinary income and separately stated items are allocated to them for year 2 based on the information above? 4,000 (2,000) $158,500 $174,500 $ 30,000 $ 50,000 Julio Milania
Julio and Milania are owners of Falcons Corporation, an S corporation. Each owns 50 percent of Falcons Corporation. In year 2, Julio and Milania each received distributions of $25,000 from Falcons Corporation. 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. Overall net income Falcons Corporation (an S Corporation) Income Statement December 31, Year 1 and Year 2 Distributions Ordinary Income Amount Year 1 $ 300,000 (40,000) (40,000) (25,000) (20,000) (30,000) 12,000 1,500 0 Julio $ 158,500 $ 30,000 a. What amount of ordinary income and separately stated items are allocated to them for year 2 based on the information above? Assume that Falcons Corporation has $200,000 of qualified property (unadjusted basis). Year 2 $430,000 (60,000) (80,000) Milania (50,000) (40,000) (50,000) 22,500 4,000 (2,000) $ 174,500 $ 50,000
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