S‐Corporation pass through items and account balances

  Compute the various S‐Corporation pass through items and account balances Facts:  Hudson Corp., is a calendar year S corporation  Hudson’s Form 1120S shows non‐separately stated ordinary income of $500,000 for the year  Kate owns 25% of the Hudson stock throughout the year  The following information for the year is obtained from the corporate records: As a team: 1) Compute Hudson’s book income or loss (NOTE: this will require being able to distinguish what items of income and expense above are separately vs. nonseparately stated; the nonseparately stated items are already included in the $500,000 – there is no need to adjust that number) 2) Compute Kate’s ending stock basis 3) Calculate Hudson’s ending AAA balance Report guidelines:  Include a cover page identifying the report and team members  The report should be type written (Excel, Word) and can be submitted in any electronic format (pdf, Word, Excel) – be sure any submitted files are formatted for printing  Support any necessary computations to be eligible for partial credit Tax exempt interest income 23,000 $ Salary paid to Kate (310,000) Charitable contributions (25,000) Dividends received from a non‐US corporation 30,000 Short‐term capital loss (25,000) Depreciation recapture income 58,000 Refund of prior state income taxes 26,000 Cost of goods sold (305,000) Long‐term capital loss (36,000) Administrative expenses (110,000) Long‐term capital gain 60,000 Selling expenses (48,000) Kate's beginning stock basis 151,000 Kate's additional Hudson stock purchases 60,000 Beginning AAA 143,000 Kate's loan to Hudson