# Week 6 Problem Set

Topics: Taxation in the United States, Tax, Gift tax in the United States Pages: 3 (655 words) Published: April 18, 2012
Learning Team E
1/30/2012
University of Phoenix
ACC 547:
James Enney

22-50

Jack and Jill are owners of UpAHill, and S-corporation. They own 25 and 75 percent, respectively.

a. What amount of ordinary income and separately stated items are allocated to them for years 1 and 2 based on the information above?

Description| UpaHill| Jack 25%| Jill 75%|
Year 1 Income| \$ 45,000.00| | |
Less:| | | |
Dividends| \$ 500.00| | |
Interest Income| \$ 2,000.00| | |
Ordinary business income| \$ 42,500.00| \$ 10,625.00| \$ 31,875.00| Separately Stated Items:| | | |
Interest Income| \$ 2,000.00| \$ 500.00| \$ 1,500.00| Dividends| \$ 500.00| \$ 125.00| \$ 375.00| Total:| \$ 45,000.00| \$ 11,250.00| \$ 33,750.00|

Description| UpaHill| Jack 25%| Jill 75%|
Year 2 Income| \$ 134,500.00 |  |  |
Less:|  |  |  |
Dividends| \$ 1,000.00 |  |  |
Interest Income| \$ 2,500.00 |  |  |
Ordinary business income| \$ 131,000.00 | \$ 32,750.00 | \$ 98,250.00 | Separately Stated Items:|  |  |  |
Interest Income| \$ 2,500.00 | \$ 625.00 | \$ 1,875.00 | Dividends| \$ 1,000.00 | \$ 250.00 | \$ 750.00 | Total:| \$ 134,500.00 | \$ 33,625.00 | \$ 100,875.00 |

The amount of income for year 1 for Jack is \$10,625.00 and for Jill it is \$33,750.00, separate stated items are for Jack are \$625.00 and for Jill it is \$1,875.00. For year 2 Jack’s income is \$32,750, and Jill’s income is \$98,250.00. Separate stated items for Jack is \$875.00 and Jill’s is \$2,625.00.

a. Complete UpaHill’s Form 1120S, Schedule K, for year

b. Complete Jill’s 1120S, Schedule K-1, for year 1.

c. Complete Jill’s 1120S Schedule K-1, for year 1.

Description| Jack| Jill|
Initial Tax Basis| \$ 24,000.00 | \$ 56,000.00 |