What would be the share of this year’s income or loss items for James Billings, one of the Kitsch shareholders?
24.What would be the share of this year’s income or loss items for James Billings, one of the Kitsch shareholders? LO.5, 6 The profit and loss statement of Kitsch Ltd., an S corporation, shows $100,000 of book income. Kitsch is owned equally by four shareholders. From supplemental data, you obtain the following information about items that are included in book income.
Selling expenses $ 21,200
Tax-exempt interest income 3,000
Dividends received 9,000 §1231 gain 7,000
Depreciation recapture income 11,000
Recovery of bad debts previously deducted 5,000
Long-term capital loss (6,000)
Salary paid to owners (each) (12,000)
Cost of goods sold (91,000)
a. Compute Kitsch’s nonseparately stated income or loss for the tax year.
b. What would be the share of this year’s income or loss items for James Billings, one of the Kitsch shareholders?