Plese help, I don't understand how to complete this Jasper Junction Corporation (JJC) is...
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Plese help, I don't understand how to complete this
Jasper Junction Corporation (JJC) is an accrual basis, calendar-year entity that was created by Chao, Iris, and Nolan in 20X1. JJC furnishes the original incorporation agreement. The shareholders' bases in the assets contributed are as follows: Cash $150,000 Equipment $245,000 Inventory $380,000 Land and Building $375,000 The first five years of business have been lean years. Nolan had to loan the corporation $75,000 to ensure that JJC had enough cash to pay its bills and its Accumulated Earnings and Profits only amounts to $23.000 at the end of 20X5. JJC has its first year of substantial income in 20x6. It also sells some of its land for $100.000 cash, but the sale results in a capital loss. The Board of Directors decides to pay $250,000 in dividends to its shareholders. This is in addition to the $3,500 of interest it pays on the bonds and the $1,500 it pays to Nolan on the money he loaned JJC. The income and expenses of JJC for 20X6, taxable income, and current E&P are provided in the Table below. Corporate Agreement Taxable Current Amount Income Income Taxable Income 176, See Sales 412,000 412,000 COGS 150,000 (150,000) Dividends (own 58) 133,000 133,000 Muni Bond Interest 1,000 1.ee Expenses Capital loss 32,935 (32,935) Interest Expense 5,000 (5,000) Operating Expenses 120,000 (120,000) Key Life Insurance Premiums 6,000 (6,600) Taxable income before Special Deductions 270,000 Charitable contributions 30,000 (27,000) (3,600) Dividend Receivable Deduction (66,500) 66,500 Taxable Income 176,500 Federal Income Tax 37,065 (37,665) Current E&P 165,000 Analyze the information provided to reconcile the shareholders' beginning and ending bases in their stock to determine the federal tax consequences of JJC's corporate distributions. (Decreases should be entered with a minus sign.) Ownership Percentage Shareholder Chao Beginning Basis in Stock Increases or (Decreases) 4 Ending Basis in Stock 1 2 3 Taxable Distributions (Dividends/Capital Gains) 15. Dividends 6. Capital gains 11. Dividends 12. Capital gains 17. Dividends 18. Capital gains Iris 7 8 9 10 Nolan 13 14 15 16 Jasper Junction Corporation (JJC) is an accrual basis, calendar-year entity that was created by Chao, Iris, and Nolan in 20X1. JJC furnishes the original incorporation agreement. The shareholders' bases in the assets contributed are as follows: Cash $150,000 Equipment $245,000 Inventory $380,000 Land and Building $375,000 The first five years of business have been lean years. Nolan had to loan the corporation $75,000 to ensure that JJC had enough cash to pay its bills and its Accumulated Earnings and Profits only amounts to $23.000 at the end of 20X5. JJC has its first year of substantial income in 20x6. It also sells some of its land for $100.000 cash, but the sale results in a capital loss. The Board of Directors decides to pay $250,000 in dividends to its shareholders. This is in addition to the $3,500 of interest it pays on the bonds and the $1,500 it pays to Nolan on the money he loaned JJC. The income and expenses of JJC for 20X6, taxable income, and current E&P are provided in the Table below. Corporate Agreement Taxable Current Amount Income Income Taxable Income 176, See Sales 412,000 412,000 COGS 150,000 (150,000) Dividends (own 58) 133,000 133,000 Muni Bond Interest 1,000 1.ee Expenses Capital loss 32,935 (32,935) Interest Expense 5,000 (5,000) Operating Expenses 120,000 (120,000) Key Life Insurance Premiums 6,000 (6,600) Taxable income before Special Deductions 270,000 Charitable contributions 30,000 (27,000) (3,600) Dividend Receivable Deduction (66,500) 66,500 Taxable Income 176,500 Federal Income Tax 37,065 (37,665) Current E&P 165,000 Analyze the information provided to reconcile the shareholders' beginning and ending bases in their stock to determine the federal tax consequences of JJC's corporate distributions. (Decreases should be entered with a minus sign.) Ownership Percentage Shareholder Chao Beginning Basis in Stock Increases or (Decreases) 4 Ending Basis in Stock 1 2 3 Taxable Distributions (Dividends/Capital Gains) 15. Dividends 6. Capital gains 11. Dividends 12. Capital gains 17. Dividends 18. Capital gains Iris 7 8 9 10 Nolan 13 14 15 16
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