Big Red Corporation is a C Corp, owned 100% by Julie (basis in shares of $150,00
ID: 2450643 • Letter: B
Question
Big Red Corporation is a C Corp, owned 100% by Julie (basis in shares of $150,000). For the current year, Big Red’s activities consist of the following items:
Gross Revenue -$1,000,000
Dividends Received (from 10% owned corp)- 100,000
LTCG- 25,000
STCL- 10,000
ABC Corporation Bond Interest Income- 5,000
City of Denver Municipal Bond Income- 4,000
Cost of Goods Sold- 430,000
Officer Salary (to Julie)- 150,000
Admin Expense- 200,000
Charitable Contributions- 50,000
Dividends Paid (to Julie)- 75,000
A) Compute Big Red’s taxable income (I have calulated as 236,000)
B) Does Big Red have any items to carry forward? (Excess Charitable contribuiton I believe of 16,000)
C) What is the AMOUNT and CHARACTER of income that Julie will report on her individual income tax return as a result of Big Red's activities? - (NEED HELP)
D) What is Julie's basis in her shares of Big Red Corporation at year end? - (NEED HELP)
Explanation / Answer
Big Red Corporation is a C Corp, owned 100% by Julie (basis in shares of $150,00
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