CHAPTER12 tax problem-4302 - CHAPTER 12 SUPPLEMENTAL HANDOUT S CORPORATION TAXATION PROBLEMS 1 Marotta Inc a calendar year S Corporation is equally

CHAPTER12 tax problem-4302 - CHAPTER 12 SUPPLEMENTAL...

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CHAPTER 12SUPPLEMENTAL HANDOUT S CORPORATION TAXATION PROBLEMS 1.Marotta, Inc., a calendar year S Corporation, is equally owned by Anthony and Samuel. Samueldied on April 1 (not a leap year) and his estate selected a March 31, fiscal year end. Marotta, Inc.had $400,000 of income for January 1 through March 31 and $600,000 of income for the remainderof the year. (a) Determine how the income is allocated to Anthony, Samuel and Samuel's estate under the Per Day Method (Pro-Rata Method).(b) Determine how the income is allocated to Anthony, Samuel and Samuel's estate under the Per-Books Method.2.Cheryll has been the sole shareholder of a calendar year S Corporation since 1981. Cheryll's stockbasis was $15,500 when she received a distribution of $17,000 in 2016. Corporate level accounts ofthe S Corporation at the time of the distribution were as follow:Accumulated Adjustments Account (AAA) $6,000Previously Taxed Income (PTI)9,000Accumulated Earnings And Profits (AEP)500(a) Determine how Cheryll is taxed on the distribution.3.During 2016, Yim, the sole shareholder of a calendar year S Corporation since 2000, received adistribution of $16,000. On December 31, 2015, Yim's stock basis was $4,000. The S Corporationearned $11,000 Ordinary Income during the year of 2016. The S Corporation has no AccumulatedEarnings And Profits (AEP).
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