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Saul, Inc., a calendar year S corporation, incurred the following items. Tax exempt bond interest income $ 7,000 Sales 130,000 Depreciation recapture income 12,000 Short term capital gain 30,000 §1231 gain 12,000 Cost of goods sold (42,000) Administrative expenses...

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...

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...

Otis is the CEO of Rectify, Inc., a private foundation. Otis invests $500,000 (80%) of the foundation’s investment portfolio in derivatives. Previously, the $500,000 had been invested in corporate bonds with an AA rating that earned 7% per annum. If the derivatives...