Question

Brian Cartwright is a single taxpayer who itemizes deductions and has no dependents. Since Year 1, Brian has owned a 50% interest in Technology Plus Inc., an S corporation from which he was paid a salary and received distributions in Year 4 (each paid according to the ratio of ownership). Technology Plus Inc.'s Year 4 income statement is included in the exhibit above. Using the information provided, enter the appropriate values in the associated fields that would appear on the K-1 S corporation tax form for Brian from Technology Plus Inc. in the table below.
Technology Plus Inc.
Condensed Income Statement
December 31, Year 4
Revenue:
Sales $ 225,000
Taxable interest income $ 5,000
Long-term capital gains $ 40,000
Total revenue
$ 270,000
Expenses:
Shareholders' salaries $ 150,000
Cost of goods sold $ 50,000
Operating expenses $ 12,000
Charitable contributions $ 1,000
MACRS depreciation $ 3,000
Section 179 deduction $ 6,000
Total expenses
$ 222,000
Year 4 taxable net income (loss) $ 48,000
Year 4 distributions to shareholders $20,000
A B
1. Ordinary business income (loss):
2. Net rental income (loss):
3. Interest income:
4. Ordinary dividends
5. Net long-term capital gain (loss):
6. Regular MACRS depreciation:
7. Section 179 deduction:
8. Charitable contributions:

Answer 1

Answer:

Following are the solution to the given points:

Explanation:

For point 1:

$=\ 22500\times 50\%\\\\=\ 22500\times \frac{50}{100}\\\\=\ 112500$

For point 2:

$=\ 48000\times 50\%\\\\=\ 48000\times \frac{50}{100}\\\\=\ 24000$

For point 3:

$=\ 5000\times 50\%\\\\=\ 5000\times \frac{50}{100}\\\\=\ 2500$

For point 4:

$=\ 20000\times 50\%\\\\=\ 20000\times \frac{50}{100}\\\\=\ 10000$

For point 5:

$=\ 40000\times 50\%\\\\=\ 40000\times \frac{50}{100}\\\\=\ 20000$

For point 6:

$=\ 3000 \times 50\%\\\\=\ 3000 \times \frac{50}{100}\\\\=\ 1500$

For point 7:

$=\ 6000\times 50\%\\\\=\ 6000\times \frac{50}{100}\\\\=\ 3000$

For point 8:

$=\ 1000 \times 50\%\\\\=\ 1000 \times \frac{50}{100}\\\\=\ 500$