Angie Smart received $5,000 per month ($60,000 in total) from SVM Dive Shop as an owner's...

Transcribed Image Text:

Angie Smart received $5,000 per month ($60,000 in total) from SVM Dive Shop as an owner's draw. Additionally, Angie Smart took $35,000 out of SVM Dive Shop near the end of the year as a partial distribution of profits. (7 points) a) Calculate the net business income of SVM Dive Shop/Angie Smart that would be reported on Schedule C of Angie's Form 1040. b) How much of the $5k per month and the $35k distribution would Angie Smart include as taxable income on her Form 1040 in addition to the Schedule C amount above? c) What amount of Angie Smart's income will be subject to self-employment tax? d) Note that you do not need to complete Schedule C, but the form will be a useful guide in completing this portion of the assignment. 3) Assume that SVM Dive Shop is a general partnership. Angie Smart owns 60% of the partnership, which she received in exchange for a $60,000 cash contributions this year. Victor Webb owns 40% of the partnership, which he received in exchange for a $40,000 cash contributions this year. Angle Smart received a $5,000 per month guaranteed payment ($60,000 in total) while Victor Webb received no guaranteed payment (as specified in the partnership agreement). The company made a $35,000 partial distribution of profits at the end of the year. (23 points, including forms) a) Calculate partnership ordinary income (loss) and separately stated items to be reported on Form 1065. b) What amount and type of taxable income must Angie Smart report on her individual Form 1040 tax return? Angie Smart received $5,000 per month ($60,000 in total) from SVM Dive Shop as an owner's draw. Additionally, Angie Smart took $35,000 out of SVM Dive Shop near the end of the year as a partial distribution of profits. (7 points) a) Calculate the net business income of SVM Dive Shop/Angie Smart that would be reported on Schedule C of Angie's Form 1040. b) How much of the $5k per month and the $35k distribution would Angie Smart include as taxable income on her Form 1040 in addition to the Schedule C amount above? c) What amount of Angie Smart's income will be subject to self-employment tax? d) Note that you do not need to complete Schedule C, but the form will be a useful guide in completing this portion of the assignment. 3) Assume that SVM Dive Shop is a general partnership. Angie Smart owns 60% of the partnership, which she received in exchange for a $60,000 cash contributions this year. Victor Webb owns 40% of the partnership, which he received in exchange for a $40,000 cash contributions this year. Angle Smart received a $5,000 per month guaranteed payment ($60,000 in total) while Victor Webb received no guaranteed payment (as specified in the partnership agreement). The company made a $35,000 partial distribution of profits at the end of the year. (23 points, including forms) a) Calculate partnership ordinary income (loss) and separately stated items to be reported on Form 1065. b) What amount and type of taxable income must Angie Smart report on her individual Form 1040 tax return?

Answer rating: 100% (QA)

Here are the stepbystep calculations for each question 1a SVM Dive ShopAngie Smart total distributio... View the full answer