stores. If Bright Light incorporated is an S corporation how much income wil be allocated to Roberto A. 32,475 B. 64,950 C. 76,400 D. 129,900
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- Roberto and Reagan are both 25-percent owner or managers for Bright Light Incorporated. Roberto runs the retail store in Sacramento, California, and Reagan runs the retail store in San Francisco, California. Bright Light generated a $125,000 profit companywide made up of a $75,000 profit from the Sacramento store, a ($25,000) loss from the San Francisco store, and a combined $75,000 profit from the remaining stores. If Bright Light is taxed as a partnership and it is decided that both Roberto and Reagan will be allocated 70 percent of his own store's profit, with the remaining profits allocated pro rata among all the owners, how much income will be allocated to Reagan in total? Multiple Choice ($25,000) ($17,500) $5,000 $20,000Roberto and Reagan are both 25 percent owners/managers for Bright Light Inc. Roberto runs the retail store in Sacramento, CA, and Reagan runs the retail store in San Francisco, CA. Bright Lingt Inc. generated a $127,800 profit company wide made up of a $75,800 profit from the Sacramento store, a ($27,000) loss from the San Francisco store, and a combined $79,000 profit from the remaining stores. If Bright Light is taxed as a partnership and decides that Roberto and Reagan will be allocated 70 percent of his own store's profit with the remaining profits allocated pro rata among all the owners, how much income will be allocated to Reagan? Multiple Choice ___ ($25,140.00) ___ ($18, 900.00) ___ $4,510.00 ___ $20,630.00Sidney and Gertrude own 40% of Bearcave Bookstore, an S corporation. The remaining 60% is owned by their son Boris. Sidney and Gertrude do not participate in operating or managing the store, and they invested $19,000 in the business when it opened in 2017. The bookstore reported the following net income (loss) for the years 2017 through 2020: 2017 2018 2019 2020 $(24,000) $(14,000) $(12,000) $5,000 a. Complete the table below to determine how much Sidney and Gertrude have at risk in Bearcave at the end of each year (2017–2020)? Note: Enter negative amounts beginning with a minus (-) sign. If a amount is zero, enter "0". 2017 2018 2019 2020 Investment/Beginning Amount at-risk $fill in the blank 683706031051064_1 $fill in the blank 683706031051064_2 $fill in the blank 683706031051064_3 $fill in the blank 683706031051064_4 Share of income (loss) fill in the blank 683706031051064_5 fill in the blank 683706031051064_6 fill…
- Kim, Khloe, and Kendall started their own fashion company that is worth $5 million. Kim has 60% ownership in the company while Khloe has 10%, and Kendall has 30%. They purchased cross-purchase disability buyout insurance in case one of the owners becomes disabled and they would use the insurance proceeds to buyout the disabled owner's interests. Based on their scenario, which of the following statements is correct? In the event of Khloe's disability, the insurer would pay $3,000,000 to Kim and $1,500,000 to Kendall. In the event of Khloe's disability, the insurer would pay $250,000 to Kim and $250,000 to Kendall. In the event of Khloe's disability, the insurer would pay $300,000 to Kim and $150,000 to Kendall. In the event of Khloe's disability, the insurer would pay $333,333 to Kim and $166,667 to Kendall.Tugade, Masinsin and Biore are all famous athletes who have been operating are sports memorabilia store for many years. The partnership decided to liquidate its operation rather than sell the business because they are each about to retire and want to go their separate ways. they have been sharing Pprofits in the ratio of 40% to tugade, 40% to masinsin, and 20% to biore.Ellie and Linda are equal owners in Otter Enterprises, a calendar year business. Ellie has a basis in Otter Enterprises of $80,000 at the beginning of the year. Linda has a basis in Otter Enterprises of $60,000 at the beginning of the year. Assume that Otter Enterprises has no debt. Otter Enterprises has $320,000 of gross income and $210,000 of operating expenses. In addition, Otter has a long-term capital gain of $15,000 and makes distributions to Ellie and Linda of $25,000 each. Required: Discuss the impact of this information on the taxable income of Otter, Ellie, and Linda if Otter is:
- Atty. Diokno owns 30% of the capital and profits of his law office. The law office reported P5,000,000 profits in 2021. The partnership is engaged in business processing outsourcing. How much will Atty. Diokno receive?Richard owns an apartment building that he actively manages which generates net rental income of $54,600. He is also a 75% general partner in the Not Now Partnership which generated a loss of $21,400 on his K-1. Richard is also a 50% shareholder in Speedy, Inc., an S corporation, which generated a $66,400 profit on his K-1. What is Richard's net income to be reported on Schedule E? Income reported on Schedule E, page 1 Income reported on Schedule E, page 2 $ LA $Premium Blinds Ltd. specializes in the manufacture of custom and pre-finished blinds and drapes for windows and doors. The firm was founded by Bill Khadim, who retired 10 years ago and now lives in Orlando, Florida. When he retired, Bill assigned 60% of the shares of the corporation to Sara Khadim, his daughter. Much of Bill's retirement income comes from the dividends he receives on his remaining Premium Blinds shares. Premium Blinds is now run by Sara. There are no other shareholders.
- Renee operates a proprietorship selling collectibles over the Web, and last year she purchased a building for $24 million for her business. This year, Rene’s proprietorship reported revenue of $95.5 million and incurred total expenses of $88.6 million. Her expenses included cost of goods sold of $48.5 million. Sales commissions paid of $16.9 million. $10.5 million of interest paid on the building mortgage, and $12.7 million of depreciation. What’s Renee’s adjusted taxable income for purposes of calculating the limitation on business interest expense? What is the maximum amount of business interest expense that Renee can deduct this year, and how is the disallowed interest expense (if any) treated? Suppose that Renee’s revenue includes $5 million of business interest income. What is the maximum amount of business interest expense that could be deducted this year under the business interest limitation?Ming and Denise, mother and daughter, operate a local restaurant as an LLC. The MD LLC earned a profit of $200,000 in the current year. Denise’s equal partnership interest was acquired by gift from Ming. Assume that capital is a material income-producing factor and that Ming manages the day-to-day operations of the restaurant without any help from Denise. Reasonable compensation for Ming’s services is $50,000. How much of the LLC’s income is allocated to Ming? What is the maximum amount of the LLC’s income that can be allocated to Denise? Assuming that Denise is 15 years old, has no other income, and is a dependent of Ming, how is Denise’s income from the LLC taxed?Amos and Thomas form the Show Corporation during the current year. Amos owns 40% of Show's stock, Thomas owns 20%, and Arthur owns the remaining 40%. Amos paid $50,000 for his interest, and Thomas paid $25,000. Amos and Thomas are responsible for Show's daily operations and serve as co-chief executive officers. During the current year, Show Corporation has an operating income of $60,000 and pays out $10,000 in dividends. Assume that Show Corporation is organized as an S corporation. In its second year of operations, Show has an operating loss of $40,000 and pays out $20,000 in dividends. On December 31, Amos gives a 10% interest in Show (i.e., ¼ of his interest) to his son, Buddy. At the end of the second year, Amos's adjusted basis is $---- and Buddy's adjusted basis is $f---- in the Show stock.