The company FPA has the following income, expense, and loss items for the curren
ID: 2407103 • Letter: T
Question
The company FPA has the following income, expense, and loss items for the current year.
Sales $850,000
Tax-exempt interest $40,000
Long-term capital gain $85,000
Short-term capital loss $35,000
Passive activity loss $20,000
Cost of goods sold $480,000
Depreciation $40,000
Section 179 expense $50,000
Other operating expenses $200,000
Net operating loss (from previous year) $24,000
Prepare a calculation of taxable income for the following scenarios and indicate the tax form(s) to report the business activity: S Corporation owned equally by Henry, Iris and Jasmine
Explanation / Answer
Answer
particulars amount amount sales 850000 LESS; cost of goods sold 480000 depreciation 40000 other operating expenses 200000 720000 net income 130000 LESS; section 179 expenses 50000 net operative income 24000 74000 56000 ADD; long term gains 50000 taxable income 106000