A calendar year S corporation’s profit and loss statement shows net profits of $90,000 (book income). The corporation is owned equally by three shareholders. From supplemental data, you obtain the following information about items included in the book income.
|
Tax exempt interest income |
$ 2,000 |
|
Dividends received |
9,000 |
|
§ 1231 gain |
6,000 |
|
Depreciation recapture income |
12,000 |
|
Recovery of bad debts |
4,000 |
|
Short term capital loss |
(6,000) |
|
Salary to owners (each) |
(10,000) |
|
Cost of goods sold |
(95,000) |
|
Administrative expenses |
(4,500) |
|
Selling expenses |
(21,200) |
|
Distribution to shareholders |
(6,000) |
a. Compute the entity’s no separately computed income or loss.
b. What would be the portion of taxable income or loss for Chang, one of the shareholders?