Ramona owns 20% of the stock of Miller, Inc. Miller reports the following items for the current year: Sales $3,400,000 Gain on sale of stock held for 2 years 250,000 Cost of goods sold 1,800,000 Operating expenses 900,000 Dividends paid to stockholders 180,000 What are the effects on Ramona's taxable income if Miller, Inc. is organized as: a. A corporation? b. An S corporation?
Answers
Answer:
Explanation:
a) A corporation?
A Corporations are taxable entities. Miller, Inc. will pay tax on its income. Ramona will be taxed on dividends received. Ramona has $36,000 ($180,000 x 20%) of dividend income from Miller. The dividend income will be taxed at 15%.
b) An S corporation?
An S corporations are conduit entities and do not pay tax on their income. The income from the conduit flows through and is taxed to the owners of the S corporation. Ramona will be taxed on 20% of Miller's income. Capital gains and losses of conduit entities must be reported separately, so that the owners can properly treat them in the calculation of their net capital gain or loss for the year. Miller has $700,000 ($3,400,000 - $1,800,000 - $900,000) of operating income and a $250,000 long-term capital gain in the current year. Ramona must include $140,000 ($700,000 x 20%) of ordinary income and $50,000 ($250,000 x 20%) of long-term capital gain on her individual return. The $140,000 of ordinary income is added to Ramona's gross income. The long-term capital gain of $50,000 is netted with other capital gains and losses. Because the income of the conduit is being taxed at the owner level, dividends paid to owners are considered to be returns of capital investment and are not taxed.
Answer: on S corporation taxable income will be affected by 140,000 and on corporation it will be 36000
Taxable income of Ramona
S corporation Corporation
share on profits 140000 0
dividends 36000
Explanation:
Miller Inc
S corporation corporation
sales 3400000 3400000
cost of sales 1800000 1800000
gross profit 1600000 1600000
other income 250000 250000
gain on sale of stock 250000 250000
operating expenses 900000 900000
Net Profit 950000 950000
dividends 0 180000
taxable income of Miller Inc
S corporation Corproration
Net Profit 950000 950000
gain on sale of stock -250000 -250000
Taxable Income 700000 700000
for the S corporation Miller gets a share of 20% on the taxable profits of the S corporation and on the corporation he gets 20% of the total dividends to shareholder. The gain is capital in nature and is not taxable income as per SARS.
Related Questions
After a few years of work in the marketing department of a small firm, you are placed in charge of the firm's inbound marketing. What are you most likely to be in charge of? Group of answer choices
Wholemark is an Internet order business that sells one popular New Year greeting card once a year. The cost of the paper on which the card is printed is $0.40 per card, and the cost of printing is $0.10 per card. The company receives $3.75 per card sold. Since the cards have the current year printed on them, unsold cards have no salvage value. Their customers are from the four areas: Los Angeles, Santa Monica, Hollywood, and Pasadena. Based on past data, the number of customers from each of the four regions is normally distributed with mean 2,300 and standard deviation 200. (Assume these four are independent.)What is the optimal production quantity for the card?
Andy is talking to his friend Bruce, who has an interest in Arlington, LLC, about purchasing his LLC interest. Bruce’s outside basis in Arlington, LLC is $21,000. This includes his $5,000 one-fourth share of the LLC’s debt. Bruce’s 704(b) capital account is $25,000. If Andy bought Bruce’s LLC interest for $18,000, what would Andy’s outside basis be in Arlington, LLC?
CoolBreeze Manufacturing produces a single product, a tabletop fan. They reported the following information from their operations last period:___________. Cost of Direct Materials used in production: $50,000 Cost of Direct Labor wages: $37,500 Variable Manufacturing Overhead: $25,000 Fixed Manufacturing Overhead: $125,000 Total units produced: 10,000Under absorption costing what was the per-unit cost of the units produced? a. None of the above b. $23.75 c. $12.50 d. $11.25 e. $8.75
Answers
Answer:
11.2
Explanation:
Your formula would be I = Overall market increased * Beta
"I" being Fords increase
so just plug in and solve
So your volatility would be 11.2
Answers
Answer:
It will deposit $ 10,082.68 per yearto fund their children tuiton
Explanation:
We calculate the present value of the tuiton:
We must notice payment are made atthe beginning of the year. So this will be an annuity-due
C 40,000 per year
time 4 year
rate 7% = 7/100 = 0.07
PV $144,972.6418
we round to 144,972.64
Then, we have two children and we stop the payment when the oldest children goes into college.
so one tuiton must be carryied two years into the future:
Principal $144,972.64
time 2 years
rate 0.07000
Amount 165,979.18
We add both to get the total value of our fund:
144,972.64 + 165,979.18 = 310,951.82 = 310,952
Finally we calculate the couta of this annuity for 17 years
PV $310,952.00
time 17 years
rate 7% = 0.07
C $ 10,082.68
Based o the fact that there are two children involved and the annual savings have to be uniform, the annual amount to fund your children's education will be $10,808.
How much should you deposit yearly?
The amount needed for both children is:
= 2 students x ( College expenses x Present value factor for Annuity due, 7%, 4 years)
= 2 x (40,000 x 3.6243)
= $271,597
This is the total amount to be saved so the amount to be saved yearly is:
271,597 = Amount x ( ( 1 + 7%)¹⁵ - 1) / 7%
Amount = 271,597 / 25.1290
= $10,808
Find out more on annuities at brainly.com/question/5303391.
For Monica (spouse) 4,000
For Chuck (son) 2,500
For Carter (Monica’s father) 5,000
Sammy and Monica’s 2019 AGI is $130,000. They file a joint return. Chuck and Carter are Sammy and Monica’s dependents.
What is Sammy and Monica’s medical expense deduction for regular income tax purposes?
Answers
Answer:
The Sammy and Monica’s medical expense deduction for regular income tax purposes is $17,750.
Explanation:
For the purpose of regular income tax, the deduction pertaining to medical expenses are available up to the extent it exceeds 10% of AGI.
Deduction available = excess expenses incurred - 7.5% of AGI
= ($16,000 + 4,000 + 2,500+5,000) - 7.5%*130000
= 27500 - 9.750
= $17,750
Therefore, The Sammy and Monica’s medical expense deduction for regular income tax purposes is $17,750.
Answers
Answer:
3.108 mi
Explanation:
at present the workforce complement = 471 which has to grow by 10%
So, the complements after growth = 471 x 1.1 = 518 (rounded off)
Total recruiting cost = No. of complements x ($1000 + Recruiting spend)
= 518 x ($1000 + $5000)
= $3,108,000 i.e. 3.108 mi
Final answer:
The recruitment cost for Baldwin's workforce next year, given the same additional spend per person as the previous year and a 10% increase in the workforce, is expected to be $2.842866 Million. This isn't among the answer options given, which may suggest an error in the question or in the options.
Explanation:
In this question, the Baldwin's workforce complement is expected to grow by 10% next year. The workforce complement this year is 471, meaning it would become 471×1.1=518 next year (rounded to the nearest person). We were given that the recruiting cost this year is 543k, and the additional amount spent above the $1,000 recruiting base last year is $5,000k - $543k = $4,457k.
Assuming the Baldwin spends the same additional amount as they did last year, their total recruiting cost next year can be estimated. Given: Base Recruiting cost = $1,000 , Additional Recruiting cost = $4,457/person. Hence , if they hire 518 people, The total cost of the recruiting would be (Base cost + Additional per person cost)× number of people hired = (1000+4457)× 518 = $2.842866 Million.
However the given options do not include this amount, so there might be an error in the question or in the specified options.
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b. fair housing laws.
c. the Equal Opportunity Act.
d. RESPA
Answers
Answer:
fair housing laws
Explanation:
The Fair Housing Act refers to the act created to bring an end to unfair practices that involve all housing-related activities. The Law was formed with the perception that each person is entitled to rent a house, buy a home, or obtain a loan on a house without fear of discrimination because of their participation in the same class of individuals.
The Fair Housing law was developed to educate tenants, lenders, investors and tenants on the patterns of accommodation that can be considered unfair.Though, the real pioneering regulation has been the 1968 Fair Housing Act that was created one week since Martin Luther King Jr. was assassinated.
Final answer:
The seller could be sued for violating fair housing laws if they refuse to show a property to a minority. These laws specifically prevent discrimination in housing. The other provided options are related to housing, but in different contexts.
Explanation:
If a seller refuses to show a property to a minority, the seller could be sued for violating b. fair housing laws. These laws prohibit discrimination based on race, color, national origin, religion, sex, familial status, or disability in the sale, rental, or financing of housing. The other options mentioned (HUD, the Equal Opportunity Act, and RESPA) are connected to housing and discrimination but under different contexts. HUD (Department of Housing and Urban Development) implements and oversees the Fair Housing Act. The Equal Opportunity Act is broader and covers various forms of discrimination in multiple fields beyond housing. RESPA (Real Estate Settlement Procedures Act) deals with mortgage loans and closing procedures, but not necessarily discrimination.
Learn more about Fair Housing Laws here:
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Answers
Answer:
loss = $1,000
Explanation:
the customer will receive $5 (call price) + $44 (call price) = $49 for every share that he/she owns.
since the market price was $59, then the customer lost $59 - $49 = $10 for every share that he/she owned, resulting in a total loss = $10 per share x 100 shares = $1,000
A call option gives the buyer the option to purchase a stock at a set price during a specific time frame.