Problem 22-22 (Algorithmic) (LO. 5, 6) The profit and loss statement of Kitsch Ltd., an S corporation, shows $320,000 book income. Kitsch is owned equally by four shareholders.. From supplemental data, you obtain the following information about items that are included in book income. Selling expenses Tax-exempt interest income ($64,000) 9,600 Dividends received 28,800 1231 gain 22,400 Depreciation recapture income 32,000 Net income from passive real estate rentals 16,000 Long-term capital loss (19,200) Salary paid to owners (each) (38,400) Cost of goods sold (288,000) a. Compute Kitsch's nonseparately stated income or loss for the tax year. The entity's nonseparately stated computed income Viss 117,400 X Feedback Check My Work S corporations are treated much like partnerships for tax purposes. With a few exceptions, S corporation generally make tax accounting and other elections at the corporate level.