Complete Tax form.
Instruction are as follows:
Tax Return Information
Overview
The case study consists of four parts, each with its own set of requirements. Each part builds on the information developed in the preceding parts:
• Part I presents financial information for a C corporation that must be used to prepare a basic Form 1120.
• Part 2 presents financial information for a partnership that is substantially identical to the information used by the C corporation. That information is used to prepare a basic Form 1065 and the related Schedule K-1 s.
• Part 3 presents financial information for an S corporation that is substantially identical to the information used by the partnership and the C corporation. That information is used to prepare a basic Form 1120S and the related Schedule K-I s.
• Part 4 presents financial information for the individual taxpayer (Ms. Maine), including the information related to the C and S corporations and the partnership. That information is used to prepare a basic Form 1040.
The objective of this case study's approach is to have you focus on how the tax treatment of essentially the same income/expense item varies by the type of entity, not to have you become a tax return preparation expert. Therefore, revenue/deduction items that do not contribute to this learning objective have been deliberately omitted. Also, alternative minimum tax factors have not been considered.
Background
Cindy Maine (S.S.N. 001-02-0012) is a successful young executive. She is single with no dependents and has ownership interests in three businesses:
• Elixir Seecorp, Inc. (E.I.N. 75-3284680), a cash basis, calendar year-end C corporation. It was incorporated January 1, 1988, in the State of New York and sells miracle cures that are non¬traditional treatments for difficult-to-cure ailments. Ms. Maine is a 90% shareholder. The other 10% is owned by L. B. Anderson (S.S.N. 011-22-3012).
• Research Associates (E.I.N.- 75-3348679), a cash basis, calendar year-end general partnership. Ms. Maine has a 90 percent interest in the entity's equity, profits, and losses; the remaining 10 percent is owned by Dr. Kanga Rue (S.S.N. 210-02-0100). This New York partnership was formed January 1, 1989, for the purpose of testing the efficacy of miracle medical cures.
• Esscorp Embalming, Inc. (E.I.N.- 75-3284791), a cash basis, calendar year-end S corporation. Ms. Maine has a 90 percent ownership interest; the remaining 10 percent is owned by Dr. I. R. Badr (S.S.N. 120-02-0200). This corporation has had a valid S corporation election in effect since it was formed June 1, 1988. It "cleans up" messes made by the testing and use of miracle
MPS.
As a matter of convenience, Ms. Maine and the businesses all use the same mailing address, 512 S. Crouse, Podunk Center, Iowa, 50169.
Taxpayer Information
Part 1 -- Form 1120
During the year ended 12/31/2015, Elixir Seecorp:
• Paid dividends of $198,000 to Ms. Maine, and $22,000 to L.B. Anderson.
• Paid officer's compensation of $75,000, of which $50,000 was paid to Ms. Maine (who was actively involved in the business).
• Made four equal and timely estimated tax payments ($8,750 each to the federal government; $3,000 each to the state government).
• Received exempt municipal interest income of $5,000.
• Received dividend income of $30,000 from Miracle Cure, Inc., (in which Elixir has a 30% ownership interest) and $20,000 from corporations in which Elixir has a 20% ownership interest. All dividends are qualified dividends.
• Paid no salariesAvages attributable to inventories.
The corporation's balance sheets and income statement are presented in Exhibits I and 2, respectively.
Exhibit 1
Elixir Seecorp, Inc. Balance Sheet
Years ended December 31, 2014 and 2015
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Balances as of
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ASSETS
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12/31/2014
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12/31/2015
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Cash
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$25,000
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$36,000
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Inventory
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$150,000
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$100,000
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Depreciable assets (net)
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$300,000
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$200.000
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TOTAL ASSETS
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$475,000
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5336.000
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LIABILITIES &
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RETAINED EARNINGS
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Accounts payable (inventory)
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$10,000
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$12,000
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Notes payable
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$25,000
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$0
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Common stock
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$25,000
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$25,000
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Unappropriated retained earnings
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$415.000
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5299,000
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TOTAL LIABILITIES &RETAINED EARNINGS
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$475,000
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5336.000
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Exhibit 2
Elixir Seecorp, Inc.
Income Statement
Year ended December 31, 2015
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Gross receipts
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$1,000,000
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Cost-of-Goods Sold
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(250,000)
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Dividend Income
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50,000
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Interest Income
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11,000
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Capital losses
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(35.000)
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$776,000
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Salaries and wages
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($345,000)
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Compensation of officers
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(75,000)
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Rents
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(55,000)
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Property taxes
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(10,000)
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Utilities
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(20,000)
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Depreciation
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(100,000)
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Charitable contributions
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(20,000)
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Federal income tax
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(35,000)
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State income tax
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(12.000)
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(S672.000) |
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C104.000 |
Propert Transactions
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Item
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Purchase**
Price - Date
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Sale
Price - Date
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100 shares of CYA stock
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$3,000 -1/1/2000
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S7,000 - 1, 15 2015
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2,000 shares of ABZ stock
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$100,000 - 6/30/2000
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S54,000 - 6/29/2015
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City of LA Bonds
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$25,000 - 10/15/2014
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S22,000 - 2/14/2015
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State of MI Bonds
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$125,000 - 5/30/2014
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$135,000 - 10/31/2015
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The taxpayer received 1099s for these transactions, but the basis was not reported to the IRS.
Section 199 Information
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Domestic Production Gross Receipts
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$317,463
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Allocable Cost of Goods Sold
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$63,493
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Deductions Allocable to DPGR
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$142,858
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W-2 Wages Related to QPAI
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$40,000
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Required
Use the information above to complete the assigned forms and schedules of the corporation's Form 1120 and Schedule D (you will not be filing a complete return).
Attached all the Forms thats needed.
Forms to Complete (2015)
•Form 1120 (not Schedule K)
•Schedule D and Forms 8949
•Form 8903
•Form 1125-A
•Form 1125-E
Check Figure: Form 1120, page 1, line 28 = $169,100
Note: On the Form 8949 that supports Schedule D, you will need to use the box B option
Attachment:- all Forms.rar
Attachment:- Excel .rar