GTE paid $15,000 of rent for a building and equipment, $20,000 for advertising, $14,000 in interest expense,
$4,000 for utilities, and $2,000 for supplies.
GTE contributed $5,000 to charity.
GTE received a $1,000 qualified dividend from a great stock investment (it owned 2 percent of the corporation
distributing the dividend), and it recognized $1,500 in short-term capital gain when it sold some of the stock.
On December 1, 2018, GTE distributed $20,000 to James and $20,000 to Paul.
GTE has qualified property of $300,000 (unadjusted basis).
Assume James and Paul formed GTE as an S corporation. Complete GTE’s Form 1120S, page 1; Form 1120 S,
Assume James and Paul formed GTE as an S corporation. Complete Paul’s Form 1120S Schedule K-1.
Assume James and Paul formed GTE as an S corporation.
Compute the tax basis of Paul’s stock in GTE at the end of 2018.
What amount of Paul’s income from GTE is subject to FICA or self-employment taxes.
What amount of income, including its character, will Paul recognize on the $20,000 distribution he receives on
What amount of tax does GTE pay on the $1,000 qualified dividend it received?