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The MGP General Partnership was created on January 1 of the current year by having Melinda, Gabe, and Pat each contribute $10,000 cash to the partnership in exchange for a one third interest in partnership income, gains, losses, deductions, and credits. On December 31...

If the beginning balance in Strauder, Inc.’s OAA is $5,700 and the following transactions occur, what is Strauder’s ending OAA balance? Depreciation recapture income $22,700 Payroll tax penalty (4,200) Tax exempt interest income 4,995 Nontaxable life insurance...

Peres, Inc., a calendar year S corporation, holds an AAA balance of $767,050 at the beginning of 2012. During the year, the following items are recorded. Sales income $206,000 Loss from real estate operation (5,000) Officers’ life insurance proceeds 100,000 Premiums...

Emeline, Inc., of Auburn, Alabama, is an accrual basis S corporation with three equal shareholders. The three cash basis shareholders have the following stock basis at the beginning of the year: Andre, $12,000; Crum, $22,000; and Barbara, $31,000. Emeline reports the...

Rodeo, Inc., a cash basis S corporation in College Station, Texas, formerly was a C corporation. Rodeo records the following assets and liabilities on January 1, 2012, the date its S election is made.   Adjusted Basis Fair MarketValue Cash $ 200,000 $ 200,000...

Bushong, Inc., a calendar year S corporation, has a “tax cash flow” provision in its shareholder agreement. Bushong must make annual distributions by the December 31 following a tax year in which there is an income pass through. Each distribution must be in an amount...

Roadrunner, Inc., is an exempt medical organization. Quail, Inc., a sporting goods retailer, is a wholly owned subsidiary of Roadrunner. Roadrunner inherited the Quail stock last year from a major benefactor of the medical organization. Quail’s taxable income is...

Pigeon, Inc., a § 501(c)(3) organization, received support from the following sources. Governmental unit A for services rendered $ 6,300 Governmental unit B for services rendered 4,500 Fees from the general public for services rendered   (each payment was $100)...

Gray, Inc., a private foundation, reports the following items of income and deductions. Interest income $ 29,000 Rent income 61,000 Dividend income 15,000 Royalty income 22,000 Unrelated business income 80,000 Rent expenses (26,000) Unrelated business expenses...