Answer Happy

George Corporation is an S corporation started on January 1, 2020, with 50 shares owned by Trey Martin and 50 shares owned by Brlanna Tabor The corporation is located at 15620 McMullen Hwy sw, Cumberland, MD 21502 and has EIN 91-8888888. The corporation is not subject to any special taxes and no wages are included in cost of goods sold. The corporation's income statement for the year and the balance sheet at year-end are presented below. The George Corporation Income Statement for the Year Ended December 31, 2020 Gross income from operations $320,000 Qualified dividends received from a 15 percent-owned domestic corporation 20,000 Total gross income 340,000 Cost of goods sold (70,000) Total income 270.000 Other expenses: Compensation of officers $80,000 Salaries and wages 20,000 Bad debts (direct charge-offs) 9,000 Repairs 3,000 Depreciation for book (tax depreciation - $90,000) 10.000 3,000 Advertising 15.000 Pavroll taxes
The George Corporation Income Statement for the Year Ended December 31, 2020 Gross income from operations Qualified dividends received from a 15 percent-owned domestic corporation Total gross income $320,000 + Cost of goods sold 20,000 340,000 (70,000) 270,000 Total income Other expenses: $80,000 20,000 9,000 Compensation of officers Salaries and wages Bad debts (direct charge-offs) Repairs Depreciation for book (tax depreciation Advertising Payroll taxes 3,000 $90,000) 10,000 3,000 15,000 (140,000) Total other expenses $130,000 Net income The George Corporation Balance Sheet
The George Corporation Balance Sheet as of December 31, 2020 Assets: + 3 Cash $109,000 Accounts receivable Inventory (at cost) 20,000 70,000 Other assets 40,000 Equipment Less: accumulated depreciation 90,000 (10,000) Total assets $319,000 $24,000 85,000 Liabilities and owners' equity: Accounts payable Note payable (due in 10 years) Common stock Retained earnings Total liabilities and owners' equity 80,000 130.000 $319,000 Required: Pranare Form 1120-S and Brianna's K-1 form She lives at 12 Bowery St. Frostburg, MD 21532 a
c Nondeductible expenses 160 Items Affe Sharehol Basis E 16d d Distributions (attach statement if required) (see Instructions) e Repayment of loans from shareholders 16e 17a Investment income. 17a 40,000 X 17 b Investment expenses. c Dividend distributions paid from accumulated earnings and profits d other items and amounts (attach statement). Other ciliation Information Recon- 176 18 50,000 Schedule L 18 Income (loss) reconciliation. Combine the amounts on lines through 10 in the far right column. From the result, subtract the sum of the amounts on lines 11 through 12d and 14p Balance Sheets per Books Beginning of tax year Assets (b) Initial Return End of tax year (d) (c) 109.000 Cash
Schedule M-2 Analysis of Accumulated Adjustments Account, Shareholders' Undistributed Taxable Tecome Previously Taxed, Accumulated Earnings and Profits, and other Adjustments Account (see instructions) (a) Accumulated (b) Shareholders (c) Accumulated (d) Other adjustments undistributed taxable adjustments account earnings and profits account income previously taxed 1 Balance at beginning of tax year 2 Ordinary income from page 1, line 21 30,000 3 Other additions .. ox 0 ) 4 Loss from page 1, line 21... Other reductions 5 30,000 X 6 Combine lines 1 through 5.... 7 Distributions.. 8 Balance at end of tax year. Subtract line 7 from line 6..... 30,000 X Form 1120-S (2020)
income (los) Shareholder's Share of Income, Deductions, Credits, etc. See separate instructions. 3 Part 1 Other net rental income (loss) A Corporation's employer identification number 94-8888888 4 Interest income B Corporation's name, address, city, state, and ZIP code George Corporation 15620 McMullen Hwy sw, Cumberland, MD 21502 5a Ordinary dividends 10,000 14 Foreign transactions C IRS Center where corporation filed return Kansas City, MO Sb Qualified dividends 10,000 6 Royalties D Part IT Information About the shareholder Shareholder's identifying number 444-11-5555 Shareholder's name, address, city, state, and ZIP code Brianna Tabor 12 Bowery Street Frostburg, MD 21532 7 Net short-term capital gain (loss) Ba Net long-term capital gain (los) 8b Collectibles (28%) gain (loss) E 50 % 8c Unrecaptured section 1250 gain F Current year allocation percentage of shares
basis 12 Other deductions 17 Other information A vº 55,000 x V** 10,000 x V OX 18 More than one activity for at-risk purposes 19 More than one activity for passive activity purposes (a) See attached statement for additional information. www.irs.gov/Form1120S Cat No. 115200 Schedule K-1 (Form 1120-5) 2020 Act Notice, see the Instructions for Form 1120-S.