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Virus Finders, Inc. Operates a Laboratory

An S Corporation Tax Return Exercise

Candace Zachary is a small business owner who owns 80 percent and is the CEO of Virus Finders, Inc., an electing S corporation that operates a medical laboratory. The company uses the cash basis and the calendar year, and reports for federal tax purposes as a partnership. The S corporation also earned interest of $1,521 and qualified dividends of $602. Operating income and expenses for 2019 were as follows:

Gross fee income $ 197,000

Supplies, etc. 22,500

Repairs and maintenance 4,400

Salary paid to Dr. Zachary 35,000

Other salaries 65,000

Payroll expenses including taxes 32,000

Interest expense 2,000

Security expense 1,560

Utilities 8,390

Insurance 7,500

Tax Depreciation on equipment (Form 4562 is not required) = Book

depreciation -0-

Other reportable items:

Distributions for the year (tax-free) $ 28,000

No compensation (GP) was paid to Dr. Zacharys co-owner, Sir

Owen, during 2019.

The balance sheet of the LLC per books (for Schedule K) follows:

Beginning Ending

Cash $ 30,000 $ 22,773

Investments 100,000 100,000

Equipment 180,000 180,000

Accumulated depreciation -180,000 -180,000

Capital $130,000 $122,773

Complete the 2019 federal Form 1120S (including Schedules L, M-1 and M-2) for the Virus Finders, Inc., and Schedule K-1 for Dr. Zachary, along with the other forms listed below. You must provide (make it up) all necessary information that is not given for the LLC.

Forms needed for assignment (go to irs.gov for forms):

1. Federal Form 1120S (all pages)

2. Federal Form 1120S (Schedule K-1)

Income 1120-S Form U.S. Income Tax Return for an S Corporation OMB No. 1545-0123 Do not file this form unless the corporation has filed or Department of the Treasury is attaching Form 2553 to elect to be an S corporation. 2019 Internal Revenue Service Go to www.irs.gov/Form 11205 for instructions and the latest information. For calendar year 2019 or tax year beginning .2019, ending 20 A Selection effective date Name D Employer identification number TYPE B Business activity code OR Number, street, and room or suite no. If a P.O. box, see instructions. E Date Incorporated number (see instructions) PRINT City or town, state or province, country, and ZIP or foreign postal code F Total assets (see instructions) C Check if Sch. M-3 attached GIs the corporation electing to be an Scorporation beginning with this tax year? Yes No if "Yes," attach Form 2553 if not already filed H Check it: (1) Final return (2) Name change (3) Address change (4) Amended return (5) Selection termination or revocation Enter the number of shareholders who were shareholders during any part of the tax year. J Check if corporation: (1) Aggregated activities for section 465 at-risk purposes (2) Grouped activities for section 469 passive activity purposes Caution: Include only trade or business income and expenses on lines 1a through 21. See the instructions for more information 1a Gross receipts or sales 1a b Returns and allowances 1b c Balance. Subtract line 1b from line 1a 1c 2 Cost of goods sold (attach Form 1125-A) 2 3 Gross profit. Subtract line 2 from line 10 3 4 Net gain (loss) from Form 4797, line 17 (attach Form 4797) 4 5 Other income (loss) (see instructions-attach statement) 5 6 Total income (loss). Add lines 3 through 5 6 7 Compensation of officers (see instructions-attach Form 1125-E) 7 8 Salaries and wages (less employment credits) 8 9 Repairs and maintenance 9 10 Bad debts 10 11 Rents 11 12 Taxes and licenses 12 13 Interest (see instructions) 13 14 Depreciation not claimed on Form 1125-A or elsewhere on return (attach Form 4562) 14 15 Depletion (Do not deduct oil and gas depletion.) 15 16 Advertising 16 17 Pension, profit-sharing, etc., plans 17 18 Employee benefit programs 18 19 Other deductions (attach statement) 19 20 Total deductions. Add lines 7 through 19 20 21 Ordinary business income (loss). Subtract line 20 from line 6 21 22a Excess net passive income or LIFO recapture tax (see instructions) 22a b Tax from Schedule D (Form 1120-5) 22b c Add lines 22a and 22b (see instructions for additional taxes) 22c 23a 2019 estimated tax payments and 2018 overpayment credited to 2019 23a b Tax deposited with Form 7004 23b c Credit for federal tax paid on fuels (attach Form 4136) 23c d Reserved for future use 23d Add lines 23a through 23d 230 24 Estimated tax penalty (see instructions). Check if Form 2220 is attached 24 25 Amount owed. If line 23e is smaller than the total of lines 220 and 24, enter amount owed 25 26 Overpayment. If line 23e is larger than the total of lines 220 and 24, enter amount overpaid 26 27 Enter amount from line 26: Credited to 2020 estimated tax Refunded 27 Under penalties of perjury, I declare that I have examined this return, including accompanying schedules and statements, and to the best of my knowledge and Sign belief, it is true, correct, and complete. Declaration of preparer (other than taxpayer) is based on all information of which preparer has any knowledge May the IRS discuss this return Here with the preparer shown below? Signature of officer Date Title See instructions. Yes No Paid PrintType preparer's name Preparer's signature Date Check OPTIN self-employed Preparer Firm's name Use Only Firm's EIN Firm's address Phone no. For Paperwork Reduction Act Notice, see separate instructions. Form 1120-S (2019) Deductions (see instructions for limitations Tax and Payments Cat. No. 11510H Page 2 Form 1120-S (2019) Schedule B Other Information (see instructions) 1 Check accounting method: a Cash b Accrual Yes No c Other (specify) 2 See the instructions and enter the: a Business activity b Product or service 3 At any time during the tax year, was any shareholder of the corporation a disregarded entity, a trust, an estate, or a nominee or similar person? If "Yes," attach Schedule B-1, Information on Certain Shareholders of an S Corporation 4 At the end of the tax year, did the corporation: Own directly 20% or more, or own, directly or indirectly, 50% or more of the total stock issued and outstanding of any foreign or domestic corporation? For rules of constructive ownership, see instructions. If "Yes," complete () through (v) below i) Name of Corporation (ii) Employer (iii) Country of (iv) Percentage of (v) If Percentage in (iv) Is 100%, Enter Identification Incorporation Stock Owned the Date (if any) a Qualified Subchapter Number (if any) S Subsidiary Election Was Made a b Own directly an interest of 20% or more, or own, directly or indirectly, an interest of 50% or more in the profit, loss, or capital in any foreign or domestic partnership (including an entity treated as a partnership) or in the beneficial interest of a trust? For rules of constructive ownership, see instructions. If "Yes," complete () through (v) below. (i) Name of Entity (ii) Employer (i) Type of Entity (iv) Country of (v) Maximum Percentage Owned Identification Organization in Profit, Loss, or Capital Number (if any) 5a At the end of the tax year, did the corporation have any outstanding shares of restricted stock? If "Yes," complete lines (l) and (ii) below. (0) Total shares of restricted stock (ii) Total shares of non-restricted stock b At the end of the tax year, did the corporation have any outstanding stock options, warrants, or similar instruments? If "Yes," complete lines (l) and (ii) below. 0 Total shares of stock outstanding at the end of the tax year (ii) Total shares of stock outstanding if all instruments were executed 6 Has this corporation filed, or is it required to file, Form 8918, Material Advisor Disclosure Statement, to provide information on any reportable transaction? 7 Check this box if the corporation issued publicly offered debt instruments with original issue discount If checked, the corporation may have to file Form 8281, Information Return for Publicly Offered Original Issue Discount Instruments. 8 If the corporation (a) was a C corporation before it elected to be an S corporation or the corporation acquired an asset with a basis determined by reference to the basis of the asset (or the basis of any other property) in the hands of a C corporation and (b) has net unrealized built-in gain in excess of the net recognized built-in gain from prior years, enter the net unrealized built-in gain reduced by net recognized built-in gain from prior years. See instructions 9 Did the corporation have an election under section 163() for any real property trade or business or any farming business in effect during the tax year? See instructions... 10 Does the corporation satisfy one or more of the following? See instructions a The corporation owns a pass-through entity with current, or prior year carryover, excess business interest expense. b The corporation's aggregate average annual gross receipts (determined under section 448(c)) for the 3 tax years preceding the current tax year are more than $26 million and the corporation has business interest expense. C The corporation is a tax shelter and the corporation has business interest expense. If "Yes," complete and attach Form 8990. 11 Does the corporation satisfy both of the following conditions? The corporation's total receipts (see instructions) for the tax year were less than $250,000. b The corporation's total assets at the end of the tax year were less than $250,000. If "Yes," the corporation is not required to complete Schedules L and M-1. Form 1120-S (2019) a Income (Loss) Deductions Form 1120-S (2019) Page 3 Schedule B Other Information (see instructions) (continued) Yes No 12 During the tax year, did the corporation have any non-shareholder debt that was canceled, was forgiven, or had the terms modified so as to reduce the principal amount of the debt? If "Yes," enter the amount of principal reduction. 13 During the tax year, was a qualified subchapter S subsidiary election terminated or revoked? If "Yes," see instructions. 14a Did the corporation make any payments in 2019 that would require it to file Form(s) 1099? b If "Yes," did the corporation file or will it file required Form(s) 1099? . 15 Is the corporation attaching Form 8996 to certify as a Qualified Opportunity Fund? If "Yes," enter the amount from Form 8996, line 14 Schedule KI Shareholders' Pro Rata Share Items Total amount 1 Ordinary business income (loss) (page 1, line 21). 1 2 Net rental real estate income (loss) (attach Form 8825) 2 3a Other gross rental income (loss) 3a b Expenses from other rental activities (attach statement) 3b c Other net rental income (loss). Subtract line 3b from line 3a c 4 Interest income. 4 5 Dividends: a Ordinary dividends 5a b Qualified dividends 5b 6 Royalties 6 7 Net short-term capital gain (loss) (attach Schedule D (Form 1120-S)) 7 8a Net long-term capital gain (loss) (attach Schedule D (Form 1120-S)) 8 b Collectibles (28%) gain (loss). 8b c Unrecaptured section 1250 gain (attach statement) 8C 9 Net section 1231 gain (loss) (attach Form 4797) 9 10 Other income (loss) (see instructions) Type 10 11 Section 179 deduction (attach Form 4562) 11 12a Charitable contributions 12a b Investment interest expense 12b C Section 59(e)(2) expenditures (1) Type (2) Amount 120(2) d Other deductions (see instructions) Type 12d 13a Low-income housing credit (section 42(1)(5)) 13a b Low-income housing credit (other) 13b c Qualified rehabilitation expenditures (rental real estate) (attach Form 3468, if applicable) 13c d Other rental real estate credits (see instructions) Type 13d Other rental credits (see instructions) Type - 13e f Biofuel producer credit (attach Form 6478) 13f g Other credits (see instructions) Type 13g 14a Name of country or U.S. possession b Gross income from all sources 14b Gross income sourced at shareholder level 14c Foreign gross income sourced at corporate level d Reserved for future use 14d e Foreign branch category 14e f Passive category 14f g General category 14g h Other (attach statement) Deductions allocated and apportioned at shareholder level Interest expense 14i j Other 14j Deductions allocated and apportioned at corporate level to foreign source income k Reserved for future use 14k | Foreign branch category 141 m Passive category 14m n General category 14n o Other (attach statement) 140 Other information p Total foreign taxes (check one): Paid Accrued 14p q Reduction in taxes available for credit (attach statement) 149 Other foreign tax information (attach statement) Form 1120-S (2019) Credits e 14h i Foreign Transactions r Page 4 Total amount Alternative Minimum Tax (AMT) Items e Form 1120-S (2019) Schedule K Shareholders' Pro Rata Share Items (continued) 15a Post-1986 depreciation adjustment b Adjusted gain or loss c Depletion (other than oil and gas) d Oil, gas, and geothermal properties-gross income Oil, gas, and geothermal properties -deductions Other AMT items (attach statement) 16a Tax-exempt interest income b Other tax-exempt income Nondeductible expenses d Distributions (attach statement if required) (see instructions) e Repayment of loans from shareholders 17a Investment income b Investment expenses Dividend distributions paid from accumulated earnings and profits d Other items and amounts (attach statement) Items Affecting Shareholder Basis 15a 15b 15c 15d 15e 15f 16a 16b 16c 16d 16e 17a 17b 17c Other ciliation Information 18 Income (loss) reconciliation. Combine the amounts on lines 1 through 10 in the far right column. From the result, subtract the sum of the amounts on lines 11 through 120 and 14p. 18 Schedule L Balance Sheets per Books Beginning of tax year End of tax year Assets (a) (b) (c) (d) 1 Cash 2a Trade notes and accounts receivable b Less allowance for bad debts 3 Inventories 4 U.S. government obligations 5 Tax-exempt securities (see instructions) 6 Other current assets (attach statement) 7 Loans to shareholders 8 Mortgage and real estate loans 9 Other investments (attach statement) 10a Buildings and other depreciable assets b Less accumulated depreciation 11a Depletable assets b Less accumulated depletion 12 Land (net of any amortization) 13a Intangible assets (amortizable only) b Less accumulated amortization 14 Other assets (attach statement) 15 Total assets Liabilities and Shareholders' Equity 16 Accounts payable 17 Mortgages, notes, bonds payable in less than 1 year 18 Other current liabilities (attach statement). 19 Loans from shareholders 20 Mortgages, notes, bonds payable in 1 year or more 21 Other liabilities (attach statement) 22 Capital stock.. 23 Additional paid-in capital 24 Retained earnings. 25 Adjustments to shareholders' equity (attach statement) 26 Less cost of treasury stock 27 Total liabilities and shareholders' equity Form 1120-S (2019) Page 5 Form 1120-S (2019) Schedule M-1 Reconciliation of Income (Loss) per Books With Income (Loss) per Return Note: The corporation may be required to file Schedule M-3. See instructions. 1 Net income (loss) per books. 5 Income recorded on books this year 2 Income included on Schedule K, lines 1, 2, not included on Schedule K, lines 1 3c, 4, 5, 6, 7, 8a, 9, and 10, not recorded through 10 (itemize): on books this year (itemize) a Tax-exempt interest $ 3 Expenses recorded on books this year not included on Schedule K, lines 1 through 12 and 14p (itemize): a Depreciation $ 6 Deductions included on Schedule K, lines 1 through 12 and 14p, not charged against book income this year (itemize): a Depreciation $ b Travel and entertainment $ 7 Add lines 5 and 6 8 Income (loss) (Schedule K, line 18). 4 Add lines 1 through 3. Subtract line 7 from line 4 Schedule M-2 Analysis of Accumulated Adjustments Account, Shareholders' Undistributed Taxable income Previously Taxed, Accumulated Earnings and Profits, and Other Adjustments Account (see instructions) (a) Accumulated (b) Shareholders' (c) Accumulated (d) Other adjustments adjustments account undistributed taxable earnings and profits account income previously taxed 1 Balance at beginning of tax year 2 Ordinary income from page 1, line 21 3 Other additions 4 Loss from page 1, line 21 5 Other reductions 6 Combine lines 1 through 5 7 Distributions. 8 Balance at end of tax year. Subtract line 7 from line 6 Form 1120-S (2019) 2019 Schedule K-1 (Form 1120-S) Department of the Treasury Internal Revenue Service 671119 Final K-1 Amended K-1 OMB No. 1545-0123 Part III Shareholder's Share of Current Year Income, Deductions, Credits, and Other Items 1 Ordinary business income (loss) 13 Credits For calendar year 2019, or tax year / beginning 2019 2 / Net rental real estate income (loss) ending 3 Other net rental income (loss) Shareholder's Share of Income, Deductions, Credits, etc. See back of form and separate instructions. 4 Interest income Part 1 Information About the Corporation A Corporation's employer identification number 5a Ordinary dividends B Corporation's name, address, city, state, and ZIP code 5b Qualified dividends 14 Foreign transactions 6 Royalties 7 Net short-term capital gain (loss) IRS Center where corporation filed return 8a Net long-term capital gain (loss) 8b Colle (28%) gain (loss) Part II Information About the Shareholder D Shareholder's identifying number 8c Unrecaptured section 1250 gain 9 E Shareholder's name, address, city, state, and ZIP code Net section 1231 gain (loss) 10 Other income (loss) 15 Alternative minimum tax (AMT) items F Shareholder's percentage of stock ownership for tax year. 11 Section 179 deduction 16 Items affecting shareholder basis 12 Other deductions For IRS Use Only 17 Other information 18 More than one activity for at-risk purposes 19 More than one activity for passive activity purposes * See attached statement for additional information. For Paperwork Reduction Act Notice, see the Instructions for Form 1120-S. www.irs.gov/Form11205 Cat. No. 11520D Schedule K-1 (Form 1120-S) 2019 Income 1120-S Form U.S. Income Tax Return for an S Corporation OMB No. 1545-0123 Do not file this form unless the corporation has filed or Department of the Treasury is attaching Form 2553 to elect to be an S corporation. 2019 Internal Revenue Service Go to www.irs.gov/Form 11205 for instructions and the latest information. For calendar year 2019 or tax year beginning .2019, ending 20 A Selection effective date Name D Employer identification number TYPE B Business activity code OR Number, street, and room or suite no. If a P.O. box, see instructions. E Date Incorporated number (see instructions) PRINT City or town, state or province, country, and ZIP or foreign postal code F Total assets (see instructions) C Check if Sch. M-3 attached GIs the corporation electing to be an Scorporation beginning with this tax year? Yes No if "Yes," attach Form 2553 if not already filed H Check it: (1) Final return (2) Name change (3) Address change (4) Amended return (5) Selection termination or revocation Enter the number of shareholders who were shareholders during any part of the tax year. J Check if corporation: (1) Aggregated activities for section 465 at-risk purposes (2) Grouped activities for section 469 passive activity purposes Caution: Include only trade or business income and expenses on lines 1a through 21. See the instructions for more information 1a Gross receipts or sales 1a b Returns and allowances 1b c Balance. Subtract line 1b from line 1a 1c 2 Cost of goods sold (attach Form 1125-A) 2 3 Gross profit. Subtract line 2 from line 10 3 4 Net gain (loss) from Form 4797, line 17 (attach Form 4797) 4 5 Other income (loss) (see instructions-attach statement) 5 6 Total income (loss). Add lines 3 through 5 6 7 Compensation of officers (see instructions-attach Form 1125-E) 7 8 Salaries and wages (less employment credits) 8 9 Repairs and maintenance 9 10 Bad debts 10 11 Rents 11 12 Taxes and licenses 12 13 Interest (see instructions) 13 14 Depreciation not claimed on Form 1125-A or elsewhere on return (attach Form 4562) 14 15 Depletion (Do not deduct oil and gas depletion.) 15 16 Advertising 16 17 Pension, profit-sharing, etc., plans 17 18 Employee benefit programs 18 19 Other deductions (attach statement) 19 20 Total deductions. Add lines 7 through 19 20 21 Ordinary business income (loss). Subtract line 20 from line 6 21 22a Excess net passive income or LIFO recapture tax (see instructions) 22a b Tax from Schedule D (Form 1120-5) 22b c Add lines 22a and 22b (see instructions for additional taxes) 22c 23a 2019 estimated tax payments and 2018 overpayment credited to 2019 23a b Tax deposited with Form 7004 23b c Credit for federal tax paid on fuels (attach Form 4136) 23c d Reserved for future use 23d Add lines 23a through 23d 230 24 Estimated tax penalty (see instructions). Check if Form 2220 is attached 24 25 Amount owed. If line 23e is smaller than the total of lines 220 and 24, enter amount owed 25 26 Overpayment. If line 23e is larger than the total of lines 220 and 24, enter amount overpaid 26 27 Enter amount from line 26: Credited to 2020 estimated tax Refunded 27 Under penalties of perjury, I declare that I have examined this return, including accompanying schedules and statements, and to the best of my knowledge and Sign belief, it is true, correct, and complete. Declaration of preparer (other than taxpayer) is based on all information of which preparer has any knowledge May the IRS discuss this return Here with the preparer shown below? Signature of officer Date Title See instructions. Yes No Paid PrintType preparer's name Preparer's signature Date Check OPTIN self-employed Preparer Firm's name Use Only Firm's EIN Firm's address Phone no. For Paperwork Reduction Act Notice, see separate instructions. Form 1120-S (2019) Deductions (see instructions for limitations Tax and Payments Cat. No. 11510H Page 2 Form 1120-S (2019) Schedule B Other Information (see instructions) 1 Check accounting method: a Cash b Accrual Yes No c Other (specify) 2 See the instructions and enter the: a Business activity b Product or service 3 At any time during the tax year, was any shareholder of the corporation a disregarded entity, a trust, an estate, or a nominee or similar person? If "Yes," attach Schedule B-1, Information on Certain Shareholders of an S Corporation 4 At the end of the tax year, did the corporation: Own directly 20% or more, or own, directly or indirectly, 50% or more of the total stock issued and outstanding of any foreign or domestic corporation? For rules of constructive ownership, see instructions. If "Yes," complete () through (v) below i) Name of Corporation (ii) Employer (iii) Country of (iv) Percentage of (v) If Percentage in (iv) Is 100%, Enter Identification Incorporation Stock Owned the Date (if any) a Qualified Subchapter Number (if any) S Subsidiary Election Was Made a b Own directly an interest of 20% or more, or own, directly or indirectly, an interest of 50% or more in the profit, loss, or capital in any foreign or domestic partnership (including an entity treated as a partnership) or in the beneficial interest of a trust? For rules of constructive ownership, see instructions. If "Yes," complete () through (v) below. (i) Name of Entity (ii) Employer (i) Type of Entity (iv) Country of (v) Maximum Percentage Owned Identification Organization in Profit, Loss, or Capital Number (if any) 5a At the end of the tax year, did the corporation have any outstanding shares of restricted stock? If "Yes," complete lines (l) and (ii) below. (0) Total shares of restricted stock (ii) Total shares of non-restricted stock b At the end of the tax year, did the corporation have any outstanding stock options, warrants, or similar instruments? If "Yes," complete lines (l) and (ii) below. 0 Total shares of stock outstanding at the end of the tax year (ii) Total shares of stock outstanding if all instruments were executed 6 Has this corporation filed, or is it required to file, Form 8918, Material Advisor Disclosure Statement, to provide information on any reportable transaction? 7 Check this box if the corporation issued publicly offered debt instruments with original issue discount If checked, the corporation may have to file Form 8281, Information Return for Publicly Offered Original Issue Discount Instruments. 8 If the corporation (a) was a C corporation before it elected to be an S corporation or the corporation acquired an asset with a basis determined by reference to the basis of the asset (or the basis of any other property) in the hands of a C corporation and (b) has net unrealized built-in gain in excess of the net recognized built-in gain from prior years, enter the net unrealized built-in gain reduced by net recognized built-in gain from prior years. See instructions 9 Did the corporation have an election under section 163() for any real property trade or business or any farming business in effect during the tax year? See instructions... 10 Does the corporation satisfy one or more of the following? See instructions a The corporation owns a pass-through entity with current, or prior year carryover, excess business interest expense. b The corporation's aggregate average annual gross receipts (determined under section 448(c)) for the 3 tax years preceding the current tax year are more than $26 million and the corporation has business interest expense. C The corporation is a tax shelter and the corporation has business interest expense. If "Yes," complete and attach Form 8990. 11 Does the corporation satisfy both of the following conditions? The corporation's total receipts (see instructions) for the tax year were less than $250,000. b The corporation's total assets at the end of the tax year were less than $250,000. If "Yes," the corporation is not required to complete Schedules L and M-1. Form 1120-S (2019) a Income (Loss) Deductions Form 1120-S (2019) Page 3 Schedule B Other Information (see instructions) (continued) Yes No 12 During the tax year, did the corporation have any non-shareholder debt that was canceled, was forgiven, or had the terms modified so as to reduce the principal amount of the debt? If "Yes," enter the amount of principal reduction. 13 During the tax year, was a qualified subchapter S subsidiary election terminated or revoked? If "Yes," see instructions. 14a Did the corporation make any payments in 2019 that would require it to file Form(s) 1099? b If "Yes," did the corporation file or will it file required Form(s) 1099? . 15 Is the corporation attaching Form 8996 to certify as a Qualified Opportunity Fund? If "Yes," enter the amount from Form 8996, line 14 Schedule KI Shareholders' Pro Rata Share Items Total amount 1 Ordinary business income (loss) (page 1, line 21). 1 2 Net rental real estate income (loss) (attach Form 8825) 2 3a Other gross rental income (loss) 3a b Expenses from other rental activities (attach statement) 3b c Other net rental income (loss). Subtract line 3b from line 3a c 4 Interest income. 4 5 Dividends: a Ordinary dividends 5a b Qualified dividends 5b 6 Royalties 6 7 Net short-term capital gain (loss) (attach Schedule D (Form 1120-S)) 7 8a Net long-term capital gain (loss) (attach Schedule D (Form 1120-S)) 8 b Collectibles (28%) gain (loss). 8b c Unrecaptured section 1250 gain (attach statement) 8C 9 Net section 1231 gain (loss) (attach Form 4797) 9 10 Other income (loss) (see instructions) Type 10 11 Section 179 deduction (attach Form 4562) 11 12a Charitable contributions 12a b Investment interest expense 12b C Section 59(e)(2) expenditures (1) Type (2) Amount 120(2) d Other deductions (see instructions) Type 12d 13a Low-income housing credit (section 42(1)(5)) 13a b Low-income housing credit (other) 13b c Qualified rehabilitation expenditures (rental real estate) (attach Form 3468, if applicable) 13c d Other rental real estate credits (see instructions) Type 13d Other rental credits (see instructions) Type - 13e f Biofuel producer credit (attach Form 6478) 13f g Other credits (see instructions) Type 13g 14a Name of country or U.S. possession b Gross income from all sources 14b Gross income sourced at shareholder level 14c Foreign gross income sourced at corporate level d Reserved for future use 14d e Foreign branch category 14e f Passive category 14f g General category 14g h Other (attach statement) Deductions allocated and apportioned at shareholder level Interest expense 14i j Other 14j Deductions allocated and apportioned at corporate level to foreign source income k Reserved for future use 14k | Foreign branch category 141 m Passive category 14m n General category 14n o Other (attach statement) 140 Other information p Total foreign taxes (check one): Paid Accrued 14p q Reduction in taxes available for credit (attach statement) 149 Other foreign tax information (attach statement) Form 1120-S (2019) Credits e 14h i Foreign Transactions r Page 4 Total amount Alternative Minimum Tax (AMT) Items e Form 1120-S (2019) Schedule K Shareholders' Pro Rata Share Items (continued) 15a Post-1986 depreciation adjustment b Adjusted gain or loss c Depletion (other than oil and gas) d Oil, gas, and geothermal properties-gross income Oil, gas, and geothermal properties -deductions Other AMT items (attach statement) 16a Tax-exempt interest income b Other tax-exempt income Nondeductible expenses d Distributions (attach statement if required) (see instructions) e Repayment of loans from shareholders 17a Investment income b Investment expenses Dividend distributions paid from accumulated earnings and profits d Other items and amounts (attach statement) Items Affecting Shareholder Basis 15a 15b 15c 15d 15e 15f 16a 16b 16c 16d 16e 17a 17b 17c Other ciliation Information 18 Income (loss) reconciliation. Combine the amounts on lines 1 through 10 in the far right column. From the result, subtract the sum of the amounts on lines 11 through 120 and 14p. 18 Schedule L Balance Sheets per Books Beginning of tax year End of tax year Assets (a) (b) (c) (d) 1 Cash 2a Trade notes and accounts receivable b Less allowance for bad debts 3 Inventories 4 U.S. government obligations 5 Tax-exempt securities (see instructions) 6 Other current assets (attach statement) 7 Loans to shareholders 8 Mortgage and real estate loans 9 Other investments (attach statement) 10a Buildings and other depreciable assets b Less accumulated depreciation 11a Depletable assets b Less accumulated depletion 12 Land (net of any amortization) 13a Intangible assets (amortizable only) b Less accumulated amortization 14 Other assets (attach statement) 15 Total assets Liabilities and Shareholders' Equity 16 Accounts payable 17 Mortgages, notes, bonds payable in less than 1 year 18 Other current liabilities (attach statement). 19 Loans from shareholders 20 Mortgages, notes, bonds payable in 1 year or more 21 Other liabilities (attach statement) 22 Capital stock.. 23 Additional paid-in capital 24 Retained earnings. 25 Adjustments to shareholders' equity (attach statement) 26 Less cost of treasury stock 27 Total liabilities and shareholders' equity Form 1120-S (2019) Page 5 Form 1120-S (2019) Schedule M-1 Reconciliation of Income (Loss) per Books With Income (Loss) per Return Note: The corporation may be required to file Schedule M-3. See instructions. 1 Net income (loss) per books. 5 Income recorded on books this year 2 Income included on Schedule K, lines 1, 2, not included on Schedule K, lines 1 3c, 4, 5, 6, 7, 8a, 9, and 10, not recorded through 10 (itemize): on books this year (itemize) a Tax-exempt interest $ 3 Expenses recorded on books this year not included on Schedule K, lines 1 through 12 and 14p (itemize): a Depreciation $ 6 Deductions included on Schedule K, lines 1 through 12 and 14p, not charged against book income this year (itemize): a Depreciation $ b Travel and entertainment $ 7 Add lines 5 and 6 8 Income (loss) (Schedule K, line 18). 4 Add lines 1 through 3. Subtract line 7 from line 4 Schedule M-2 Analysis of Accumulated Adjustments Account, Shareholders' Undistributed Taxable income Previously Taxed, Accumulated Earnings and Profits, and Other Adjustments Account (see instructions) (a) Accumulated (b) Shareholders' (c) Accumulated (d) Other adjustments adjustments account undistributed taxable earnings and profits account income previously taxed 1 Balance at beginning of tax year 2 Ordinary income from page 1, line 21 3 Other additions 4 Loss from page 1, line 21 5 Other reductions 6 Combine lines 1 through 5 7 Distributions. 8 Balance at end of tax year. Subtract line 7 from line 6 Form 1120-S (2019) 2019 Schedule K-1 (Form 1120-S) Department of the Treasury Internal Revenue Service 671119 Final K-1 Amended K-1 OMB No. 1545-0123 Part III Shareholder's Share of Current Year Income, Deductions, Credits, and Other Items 1 Ordinary business income (loss) 13 Credits For calendar year 2019, or tax year / beginning 2019 2 / Net rental real estate income (loss) ending 3 Other net rental income (loss) Shareholder's Share of Income, Deductions, Credits, etc. See back of form and separate instructions. 4 Interest income Part 1 Information About the Corporation A Corporation's employer identification number 5a Ordinary dividends B Corporation's name, address, city, state, and ZIP code 5b Qualified dividends 14 Foreign transactions 6 Royalties 7 Net short-term capital gain (loss) IRS Center where corporation filed return 8a Net long-term capital gain (loss) 8b Colle (28%) gain (loss) Part II Information About the Shareholder D Shareholder's identifying number 8c Unrecaptured section 1250 gain 9 E Shareholder's name, address, city, state, and ZIP code Net section 1231 gain (loss) 10 Other income (loss) 15 Alternative minimum tax (AMT) items F Shareholder's percentage of stock ownership for tax year. 11 Section 179 deduction 16 Items affecting shareholder basis 12 Other deductions For IRS Use Only 17 Other information 18 More than one activity for at-risk purposes 19 More than one activity for passive activity purposes * See attached statement for additional information. For Paperwork Reduction Act Notice, see the Instructions for Form 1120-S. www.irs.gov/Form11205 Cat. No. 11520D Schedule K-1 (Form 1120-S) 2019

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