Question: In January of the current year Don and Steve each
In January of the current year, Don and Steve each invested $100,000 cash to form a corporation to conduct business as a retail golf equipment store. On January 5, they paid Bill, an attorney, to draft the corporate charter, file the necessary forms with the state, and write the bylaws. They leased a store building and began to acquire inventory, furniture, display equipment, and office equipment in February. They hired a sales staff and clerical personnel in March and conducted training sessions during the month. They had a successful opening on April 1, and sales increased steadily throughout the summer. The weather turned cold in October, and all local golf courses closed by October 15, which resulted in a drastic decline in sales. Don and Steve expect business to be very good during the Christmas season and then to taper off significantly from January 1 through the end of February. The corporation accrued bonuses to Don and Steve on December 31, payable on April 15 of the following year. The corporation made timely estimated tax payments throughout the year. The corporation hired a bookkeeper in February, but he does not know much about taxation. Don and Steve have retained you as a tax consultant and have asked you to identify the tax issues they should consider.
Answer to relevant QuestionsIn the current year, Juanita and Joseph form a two-member LLC and do not file Form 8832 (Entity Classification Election). As a result, the LLC will be treated as a partnership for Federal tax purposes. Assess the validity of ...Tern Corporation, a calendar year C corporation, is solely owned by Jessica Ramirez. Tern’s only business since its incorporation in 2012 has been land surveying services. In Tern’s state of incorporation, land surveying ...What is the effect of the following on unadjusted AMTI in arriving at ACE? a. Proceeds from life insurance on key employee. b. Tax-exempt income (net of expenses). c. Exemption amount of $40,000. d. IDC deducted ...This year Saluda Hills Inc., has QPAI of $940,000 and taxable income of $980,000. Because Saluda Hills outsources much of its work to independent contractors, its W–2 wage base that relates entirely to domestic production ...Meadowbrook, Inc., is considered a personal holding company and has the following information: Taxable income ................ $345,000 Federal income tax liability ............ 102,000 Dividends-received deduction ...
Post your question