The company FPA has the following income, expense, and loss items for the curren

Question

The company FPA has the following income, expense, and loss items for the current year.

Sales $850,000
Tax-exempt interest $40,000
Long-term capital gain $85,000
Short-term capital loss $35,000
Passive activity loss $20,000
Cost of goods sold $480,000
Depreciation $40,000
Section 179 expense $50,000
Other operating expenses $200,000
Net operating loss (from previous year) $24,000

Prepare a calculation of taxable income for the following scenarios and indicate the tax form(s) to report the business activity: S Corporation owned equally by Henry, Iris and Jasmine

Explanation / Answer

Answer   

particulars amount amount sales 850000 LESS; cost of goods sold 480000 depreciation 40000 other operating expenses 200000 720000 net income 130000 LESS; section 179 expenses 50000 net operative income 24000 74000 56000 ADD; long term gains 50000 taxable income 106000

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