Swallow Company is a large real estate construction company that has made a Subchapter S election. The
Question:
a. Compute the gross profit on the contract for 2013 and 2014.
b. Compute the lookback interest due or receivable with the 2014 tax return.
c. Before bidding on a contract, Swallow generally makes three estimates of total contract costs: (1) optimistic, (2) pessimistic, and (3) most likely (based on a blending of optimistic and pessimistic assumptions). The company has asked you to write a letter explaining which of these estimates should be used for percentage of completion purposes. In writing your letter, you should consider the fact that Swallow is incorporated and has made an S corporation election. Therefore, the income and deductions flow through to the shareholders who are all individuals in the 35% marginal tax bracket. The relevant Federal interest rate is 8%. Swallow's mailing address is 400 Front Avenue, Ashland, OR 97520.
Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Related Book For
South Western Federal Taxation 2014 Comprehensive Volume
ISBN: 9781285180922
37th Edition
Authors: William H. Hoffman, David M. Maloney, William A. Raabe, James C. Young
Question Posted: