Melvin leases a building that he owes to his wholly-owned S corporation for $30,000 for the year. Melvin materially participates in the S corporation. What amount does Melvin have to report as net investment income for the year from the $30,000?
Answer: the whole $30,000 should be reported.
This is a passive income although there is materially participation. It happens because this is the rental activity, which is passive.
Therefore, the whole amount of income would be treated as net investment income.
Melvin leases a building that he owes to his wholly-owned S corporation for $30,000 for the...
Melvin leases a building that he owes to his wholly-owned S corporation for $30,000 for the year. Melvin materially participates in the S corporation. What amount does Melvin have to report as net investment income for the year from the $30,000?
On April 1, 2020, Republic Company sold equipment to its wholly owned subsidiary, Barre Corporation, for $40,000. At the time of the transfer, the asset had an original cost (to Republic) of $60,000 and accumulated depreciation of $25,000. The equipment has a five year estimated remaining life. Barre reported net income of $250,000, $270,000 and $310,000 in 2020, 2021, and 2022, respectively. Republic received dividends from Barre of $90,000, $105,000 and $120,000 for 2020, 2021, and 2022, respectively. Assume Republic...
On January 1, 2018, Ackerman sold equipment to Brannigan (a wholly owned subsidiary) for $270,000 in cash. The equipment had originally cost $243,000 but had a book value of only $148,500 when transferred. On that date, the equipment had a five-year remaining life. Depreciation expense is computed using the straight-line method. Ackerman reported $370,000 in net income in 2018 (not including any investment income) while Brannigan reported $121,100. Ackerman attributed any excess acquisition-date fair value to Brannigan's unpatented technology, which...
On January 1, 2018, Ackerman sold equipment to Brannigan (a wholly owned subsidiary) for $340,000 in cash. The equipment had originally cost $306,000 but had a book value of only $187,000 when transferred. On that date, the equipment had a five-year remaining life. Depreciation expense is computed using the straight-line method. Ackerman reported $440,000 in net income in 2018 (not including any investment income) while Brannigan reported $144,200. Ackerman attributed any excess acquisition-date fair value to Brannigan's unpatented technology, which...
On January 1, 2018, Ackerman sold equipment to Brannigan (a wholly owned subsidiary) for $280,000 in cash. The equipment had originally cost $252,000 but had a book value of only $154,000 when transferred. On that date, the equipment had a five-year remaining life. Depreciation expense is computed using the straight-line method. Ackerman reported $380,000 in net income in 2018 (not including any investment income) while Brannigan reported $124,400. Ackerman attributed any excess acquisition-date fair value to Brannigan's unpatented technology, which...
On January 1, 2018, Ackerman sold equipment to Brannigan (a wholly owned subsidiary) for $190,000 in cash. The equipment had originally cost $171,000 but had a book value of only $104,500 when transferred. On that date, the equipment had a five-year remaining life. Depreciation expense is computed using the straight-line method. Ackerman reported $470,000 in net income in 2018 (not including any investment income) while Brannigan reported $154,100. Ackerman attributed any excess acquisition-date fair value to Brannigan's unpatented technology, which...
On January 1, 2018, Ackerman sold equipment to Brannigan (a wholly owned subsidiary) for $120,000 in cash. The equipment had originally cost $108,000 but had a book value of only $66,000 when transferred. On that date, the equipment had a five-year remaining life. Depreciation expense is computed using the straight-line method. Ackerman reported $540,000 in net income in 2018 (not including any investment income) while Brannigan reported $177,200. Ackerman attributed any excess acquisition-date fair value to Brannigan's unpatented technology, which...
On January 1, 2018, Ackerman sold equipment to Brannigan (a wholly owned subsidiary) for $360,000 in cash. The equipment had originally cost $324,000 but had a book value of only $198,000 when transferred. On that date, the equipment had a five-year remaining life. Depreciation expense is computed using the straight-line method. Ackerman reported $460,000 in net income in 2018 (not including any investment income) while Brannigan reported $150,800. Ackerman attributed any excess acquisition-date fair value to Brannigan's unpatented technology, which...
On January 1, 2018, Ackerman sold equipment to Brannigan (a wholly owned subsidiary) for $250,000 in cash. The equipment had originally cost $225,000 but had a book value of only $137,500 when transferred. On that date, the equipment had a five-year remaining life. Depreciation expense is computed using the straight-line method. Ackerman reported $350,000 in net income in 2018 (not including any investment income) while Brannigan reported $114,500. Ackerman attributed any excess acquisition date fair value to Brannigan's unpatented technology,...
On January 1, 2018, Ackerman sold equipment to Brannigan (a wholly owned subsidiary) for $190,000 in cash. The equipment had originally cost $171,000 but had a book value of only $104,500 when transferred. On that date, the equipment had a five-year remaining life. Depreciation expense is computed using the straight-line method. Ackerman reported $470,000 in net income in 2018 (not including any investment income) while Brannigan reported $154,100. Ackerman attributed any excess acquisition-date fair value to Brannigan's unpatented technology, which...