Question

Samuel Inc, a calendar year S-Corporation, Sam and Don, each owning 50% of the stock. Determine of each separately and non-separately stated pass-through item to be reported by Sam, i.e. determine how would they be shown on his K-1. To do this determine: - Whether an item is a separately stated or non-separately stated item, - The amount of Sam's portion for each item - The nature of each item (i.e. capital gain/loss, 1231 gain/loss, etc) Samuel, Inc. reported the following:

$210,000 Sales

80,000 Cost of goods sold

20,000 Depreciation expense

7,000 General and administrative expenses

7,100 Section 1231 gain

8,000 Section 1245 gain

7,700 Long-term capital gain from stock sale

11,000 Long-term capital loss from stock sale

9,300 Charitable contributions

Answer 1

Below are non-separately stated items:

$210,000 Sales

80,000 Cost of goods sold

20,000 Depreciation expense

7,000 General and administrative expenses

Net ordinary income from above is = 210,000 - 80,000 - 20,000 - 7,000 = 103,000

Sam's share of ordinary inocme = 103,000 X 50% = 51,500

Share of separately stated items:

Section 1231 gain = 3,550

Section 1245 gain = 4,000

LTCG = 3,850

LTCL = 5,500

Charity = 4,650