@aatoural yeah I'm a little confused by that as well.
I'm wondering if E&P always relates to C Corp income and S Corp income is always AAA? So even though they don't say its sub chapter C E&P it's assumed the $75K in E&P is related to the C Corp and the $132K AAA (30+102) relates to the S Corp income.
FAR - 78
REG - 72,74,71...please just go away REG nobody likes you!
BEC - 82
AUD - Aug 16
How much is the Included income
My answer is to deduct 1/2 of the S/E tax! it was wrong. As i know we should deduct 1/2 SE FICA.
The correct answer was 37,000 not 38,300 as i thought.
Please help?
@dtatham10
This was the head of the questions;
From the information provided, determine the amount of gross income to be reported on “the individual income tax return” and indicate the amount excluded from tax (if any).
he should report half of the S/E tax as adjustment to arrive at AGI, right ?
@gak yeah he should definitely report 1/2 the tax on the adjustments to arrive at AGI. I'm reading the question based on the info they provide what income from the schedule C activity needs to be reported on the individual return. From that point, you would exclude it from the schedule C.
FAR - 78
REG - 72,74,71...please just go away REG nobody likes you!
BEC - 82
AUD - Aug 16
@dtatham10 @aatoural thanks for clearing that up for me. I wasn't sure if the distribution was applied to them separately or one on top of the other if that makes sense.
You were right there was a typo (my bad) May28th should be $22/share. So the last thing I dont understand is the new basis of 24. can you explain why you would add +2 to the May28th purchase price of 22? In my mind the new basis should be $22 because we sold the original 500 shares (or am i taking that to FAR (pun intended) and trying to make this a LIFO/FIFO inventory question).
DATE (Purch/Sale)– Shares /Price
Jan. 01 – (Purchase) — 500/$25
May 12 – (Sale)– 500/23
May 28 – (Purchase)– 250/$22
Oct 15 – (Sale)– 100/$18
.