Assume I owned a business:
Ronda’s Crporation,( a calendar year, accrual basis taxpayer) had the following transactions during 2006, its second year of operation.
Taxable Incom-320,000
Federal Income Tax Liability-108,050
Interest Income from tax-exempt payors-4,000
Meals and Entertainment expenses-2,000
Premiums paid on key employee life insurance-2,500
Increase in cash surrender value attributable to life insurance-600
Proceeds from key employee life insurance policy-120,000
Cash surrender value of life insurance-15,000
Excess of capital losses over capital gains-11,000
MACRS deductions-24,000
Straight 179 expense elected during 2005-90,000
Organizational expenses incurred in 2005-12,000
Dividends received from domestic corporations(less than 20% owned)-20,000

I will use the LIFO inventory method and its LIFO recapture amount increased by
9,000 during 2006. I also sold property on installent during 2005.. The property was sold for 30,000 and had as adjusted basis at sale of 22,000. During 2006 , I received a 10,000
Payment on the installment sale. I elected to amoritize its qualified organizational expenses in 2005. Please help me to compute Ronda’s Corporation current Earnings and Profit.

1. Individuals J and K form X Corporation. J contributes property for 95% of X stock while K contributes ,000 of services for 5% of X stock. K’s basis in D stock is?
A. 20,000
B. 40,000
C. 7,000
D. 14,000
E. 13,000

2. G corporation donates inventory having a FMV of 0,000 (adjusted basis ,000) to a qualified public charity. The inventory will be used by the charity for care of the ill. The maximum charitable deduction is?

3. X Corporation has accumulated E&P of 0,000 and current E&P of ,000. The corporation has reasonable business needs of ,000. If the corporation is not a service corporation, the amount of earnings subject to the accumulated earnings tax would be?

4. P Corporation owns all of the stock of S Corporation. P’s basis in S’s stock is 0,000. S Corporation becomes insolvent and has no assets to redeem any of P’s stock. P can recognize?
A. A 0,000 short-term capital loss
B. A 0,000 long term capital loss
C. No loss
D. A 0,000 bad debt

I have/had a business for the past 8 years. Last year I made absolutely no money .(Personal problems). The s corporation that I have, owes the bank on overdrafts and line of credit. I was lucky enough to get fill in positions, day here and there, totalling about ,000. Can I claim that as income? I did not get any 1099′s as I never earned more than 0.00 at any one time. I cashed in mutual funds for less than I paid for them and even though I paid taxes on that money in the years I earned it, can this be used as income? I also spent all my savings and basically that is how I survived. I am a single mother of one child. I’m barely hanging on to my house, spent a lot on interest, property taxes, have deductions for ,00.00 approx, will probably get 0 refund and am worried now that I may not even get the rebate. I did not recieve the letter. I have a small amount of interest earned to claim, but that’s it. Any help would be appreciated , thanks.

I an the sole owner of as S corporation. It would be convenient for me to have it pay for my car expenses. I would also like to deduct the business mileage I drive from my income taxes. I suspect this is not legit, but just wanted to see what others had to say

Thanks

We operate a S Corporation and this as of next month it is 3 years
since we gotten a new car, we were considering purchasing a Nissan
Altima Hybrid 07 which comes with 00 tax credit, would we still be
able to receive the business tax deduction and the tax credit if we
purchase it under the business? Also, are we allowed to since this
will soon be more than 3 years since we made our last car purchase for
our business?
So you are saying the credit will get split among all the shareholders of the S Corp?