Due: Sunday, March 5th by 11:59 pm CST Total points: 20 The book basis financials of...

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Due: Sunday, March 5th by 11:59 pm CST Total points: 20 The book basis financials of Saldia, Inc. for the year ended 12/31/22 are shown below. On January 1, 2022, Salida had two shareholders. Selena, owned 75% of the stock and Hector owned 25% of the stock. They have both owned their stock since the inception of Seleda in 2018. On March 31, 2022, Hector sold all of his stock to Isabella for $500. Salida made two distributions during the year. They distributed $70,000 on February 1, 2022 ($52,500 to Selena and $17,500 to Hector) and $10,000 on November 1, 2022 ($7,500 to Selena and $2,500 to Isabella). On January 1, 2022, Selena's basis in her stock was $2,000 and Hector's was $800. Answer the questions on the following page. (Show your work! Round your answer to the nearest whole dollar) Sales CGS Gross profit Salaries Entertainment expenses Depreciation expense Operating expenses Ordinary income UIUC Gies College of Business ACCY 451: Advanced Income Tax Problems Spring 2023 Homework #4 Dividend income Capital gains Dividend received deduction Other income (expenses) Net Book $750,000 ($400,000) $350,000 ($250,000) ($6,000) ($75,000) ($331,000) $19,000 $22,000 $10,000 $32,000 $51,000 Book-tax differences Tax Additional information: Salida's accumulated E&P on January 1, 2022 was $28,000. Salida's MACRS depreciation was $58,000 and ADS depreciation was $95,000 for the year. Salida has a capital loss carryforward of $7,000 from 2019. 449 words E&P Current adjustments E&P The dividends are from a small investment in another corporation. Salida owns less than 1% of the other corporation. Taxable revenue from sales is $765,000 when the all-events test is applied. 1. What is Salida's taxable income? 2. What is Salida's current E&P? 3. For the February 1, 2022 distribution, how much is Dividend b. Non-dividend distribution 4. For the November 1, 2022 distribution, how much is Dividend a. a. b. Non-dividend distribution 5. How much of the February 1, 2022 distribution is taxed as the following for Selena? a. Dividend b. Capital gain Not taxed 6. How much of the February 1, 2022 distribution is taxed as the following for Hector? a. Dividend b. Capital gain Not taxed C. C. 7. How much of the November 1, 2022 distribution is taxed as the following for Selena? a. Dividend b. Capital gain C. Not taxed 8. How much of the November 1, 2022 distribution is taxed as the following for Isabella? a. Dividend b. Capital gain c. Not taxed 9. What is Salida's E&P after both distributions? Current a. b. Accumulated 10. What is Selena's basis in her stock on January 1, 2023 assuming there were no other transactions for the year? 11. What is Isabella's basis in her stock on January 1, 2023, assuming there were no other transactions for the year? 12. What was Hector's gain (loss) on the sale of his stock to Isabella? 449 words Due: Sunday, March 5th by 11:59 pm CST Total points: 20 The book basis financials of Saldia, Inc. for the year ended 12/31/22 are shown below. On January 1, 2022, Salida had two shareholders. Selena, owned 75% of the stock and Hector owned 25% of the stock. They have both owned their stock since the inception of Seleda in 2018. On March 31, 2022, Hector sold all of his stock to Isabella for $500. Salida made two distributions during the year. They distributed $70,000 on February 1, 2022 ($52,500 to Selena and $17,500 to Hector) and $10,000 on November 1, 2022 ($7,500 to Selena and $2,500 to Isabella). On January 1, 2022, Selena's basis in her stock was $2,000 and Hector's was $800. Answer the questions on the following page. (Show your work! Round your answer to the nearest whole dollar) Sales CGS Gross profit Salaries Entertainment expenses Depreciation expense Operating expenses Ordinary income UIUC Gies College of Business ACCY 451: Advanced Income Tax Problems Spring 2023 Homework #4 Dividend income Capital gains Dividend received deduction Other income (expenses) Net Book $750,000 ($400,000) $350,000 ($250,000) ($6,000) ($75,000) ($331,000) $19,000 $22,000 $10,000 $32,000 $51,000 Book-tax differences Tax Additional information: Salida's accumulated E&P on January 1, 2022 was $28,000. Salida's MACRS depreciation was $58,000 and ADS depreciation was $95,000 for the year. Salida has a capital loss carryforward of $7,000 from 2019. 449 words E&P Current adjustments E&P The dividends are from a small investment in another corporation. Salida owns less than 1% of the other corporation. Taxable revenue from sales is $765,000 when the all-events test is applied. 1. What is Salida's taxable income? 2. What is Salida's current E&P? 3. For the February 1, 2022 distribution, how much is Dividend b. Non-dividend distribution 4. For the November 1, 2022 distribution, how much is Dividend a. a. b. Non-dividend distribution 5. How much of the February 1, 2022 distribution is taxed as the following for Selena? a. Dividend b. Capital gain Not taxed 6. How much of the February 1, 2022 distribution is taxed as the following for Hector? a. Dividend b. Capital gain Not taxed C. C. 7. How much of the November 1, 2022 distribution is taxed as the following for Selena? a. Dividend b. Capital gain C. Not taxed 8. How much of the November 1, 2022 distribution is taxed as the following for Isabella? a. Dividend b. Capital gain c. Not taxed 9. What is Salida's E&P after both distributions? Current a. b. Accumulated 10. What is Selena's basis in her stock on January 1, 2023 assuming there were no other transactions for the year? 11. What is Isabella's basis in her stock on January 1, 2023, assuming there were no other transactions for the year? 12. What was Hector's gain (loss) on the sale of his stock to Isabella? 449 words

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