Assume the following racts: As of January 6, 20x1, Taylor and Barr each owned 10

Question

Assume the following racts:
As of January 6, 20x1, Taylor and Barr each owned 100 shares of the 200 issued shares of Lan stock. On January 31, 2ox1, Taylor and Barr each sold twenty shareds to Pike. No election was made to terminate the tax year. Lan had net business income of $14,400 for the year ended December 31, 20x1, and made no distributions to its shareholders. Lan’s 20x1 calendar year had 360 days.
What amount of net business income should have been reported on Pike’s 20x1 Schedule K-1 form Lan? (20x1 is a 360 day tax year) Round the answer to the nearest hundred.

Explanation / Answer

Taylor stock holding in Lan Stock = 100

Barr holding =100

Each transfered 20 share to Pike

net income of Lan is 14400

amount of net business income to be shown on Pike schedule is

14400X20/200X329/360=1316 $

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