Joined: 02 Jan 2011
Online Status: Offline Posts: 83
Posted: 05 May 2012 at 12:06 | IP Logged
Evan, an individual, has a 40% interest in EF, an S
corporation. At the beginning of the year, Evan’s basis
in EF was $2,000. During the year, EF distributed
$100,000 and reported operating income of $200,000. What
amount should Evan include in gross income?
$ 38,000
$ 40,000
$ 80,000
$118,000
answer is 80000.
Why is he only including 80,000 in the gross income? What
about 40,000 ((100000*40%) Would it be ordinary income to
the owner?). I am confused. Thank you
__________________ FAR - passed
REG - passed
AUD -
Wiley, some lectures from Becker
Joined: 02 Jan 2011
Online Status: Offline Posts: 83
Posted: 05 May 2012 at 17:38 | IP Logged
I understand that 80000 would be included in gross income
on his 1040 form. But what about $40000? This is income to
Evan as well, right? Why is it not included in his gross
income?
__________________ FAR - passed
REG - passed
AUD -
Wiley, some lectures from Becker
Joined: 02 Jan 2011
Online Status: Offline Posts: 83
Posted: 05 May 2012 at 17:50 | IP Logged
OK! I got it.))) 100000 of 200000 was distributed. I
thought 100000 was distributed and 200000 will be
distributed later. Too much learning. I got overloaded.
Thank you for your answer, jakemia.
__________________ FAR - passed
REG - passed
AUD -
Wiley, some lectures from Becker
You cannot post new topics in this forum You cannot reply to topics in this forum You cannot delete your posts in this forum You cannot edit your posts in this forum You cannot create polls in this forum You cannot vote in polls in this forum
Active Topics 
Memberlist 
Search 
Help
Register 
Login
Topic: S-corp (owner’s gross income)
Topic Closed)
