TAX project

In the blackboard course, under Assignments, Project S  corp there is posted a document  ScorporationtaxlawreScorporationProject.doc  

 

That posted document has the following Solution from a problem in the undergraduate text. The Solution should help with the format in which to prepare the S Corp Project answers.

 

            b.         Beginning stock basis                                                                               $32,000

                        Add:

                              Ordinary income                                                   $32,000

                              Tax-exempt interest                                                  1,200

                              Dividends received                                                   2,000

                              Recovery of state taxes                                             2,000

                              LTCG                                                                       5,600

                              Additional investment                                               9,000                   51,800 

                                                                                                                                      $83,800 

                        Less:

                              Charitable contribution                                         $  2,400

                              LTCL                                                                        2,800

                              STCL                                                                       2,400                    (7,600)

                        Ending stock basis                                                                                    $76,200 

 

            c.         Beginning AAA                                                                                          $31,000

                        Add:

                              Ordinary income                                                   $80,000

                              Dividends received                                                   5,000

                              Recovery of state taxes                                             5,000

                              LTCG                                                                     14,000                 104,000 

                                                                                                                                    $135,000 

                        Less:

                              Charitable contributions                                        $  6,000

                              LTCL                                                                        7,000

                              STCL                                                                        6,000                  (19,000)

                       Ending AAA                                                                                              $116,000