58 nicole a calendar year individual owns 30of creole, Ask an Expert

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58 Nicole, a calendar year individual, owns 30%of Creole Cravings,inc,. a C corporation that was formed on February 1,2011. She receives a $5000 monthly salary from the corporation, and Creole cravings generates $200000 of taxable income (after accounting for payments to Nicole) for its tax year ending January 31,2012

a. How do these activities affect Nicole's 2011 adjusted gross income?

b. Assume, instead that Creole cravings is a partnership (January 31 year-end) and that it classifies Nicole's salary as a guaranteed payment. How do these activities affect Nicole's 2011 and 2012 adjusted gross income?

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Accounting Basics, Accounting

Category:- Accounting Basics
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