Inc. begins year 10 with 423,000 of Accumulated E&P. Determine current and accumulated E&P…
Inc. begins year 10 with 423,000 of Accumulated E&P. Determine current and accumulated E&P for the years 10, 11, & 12, and the tax treatment of distributions with the following data:
YEAR 10 YEAR 11 YEAR 12
Taxable Income (loss) 350,000 (150,000) 533,000
Taxes paid 140,000 0 93,000
Insurance Premiums 100,000 120,000 95,000
Life Insurance Death benefit 0 250,000 100,000
Tax Exempt Income 85,000 20,000 50,000
Total Meal & Entertainment 100,000 88,000 52,000
Section 179 Expense 100,000 20,000 10,000
Capital Loss Cf (75,000)
Capital Gain 25,000 55,000 10,000
Capital Loss (35,000)
NOL Carryforward 140,000
Distributions 1,000,000 200,000 250,000
Prior Section 179 expense information:
04 $ 16,000
05 $ 31,550
06 $ 200,000
07 $ 25,000
08 $ 60,000
09 $ 30,000
There is an Installment Sale in year 10 for $3,700,000. $2,220,000 was paid in year 10, $925,000 will be paid in year 11 and 555,000 will be paid in year 12. The asset’s adjusted basis is $400,000.
There was an installment sale in year 8 for $1,000,000. $500,000 was paid in year 8, $250,000 was paid in year 9, and the final $250,000 was paid in year 10. The asset’s adjusted basis was $400,000.
