Corporation Workshop Return 1 Title: Summary:
Corporation Workshop Return 1 In this lesson, you will learn the following: 1. Create Form 1120; 2. Complete Schedule D, Capital Gains and Losses; 3. Complete Form 4562, Depreciation and Amortization, with multiple depreciation worksheets; 4. Enter a prior year NOL carryover; 5. Compute alternative minimum tax for a corporation; 6. Electronically file the corporate return.
Average completion time: 1 hour, 30 minutes Steps for Corporation Workshop Return 1
Start a new return using 30-1XXXXXX. Use your company’s EFIN for “XXXXXX.” Use 11-1111111 as the EIN only if you plan to practice electronically filing these returns through the ATX Training Electronic Filing Center. Otherwise, use a unique number agreed upon by your company.
Support Staffing, Inc. specializes in home health care and wants to file their corporation return. The address is 1876 Main Street, Rome, GA 30165. The EIN is 30-1XXXXXX and they were incorporated on August 1, 1993. Gross receipts for the year were $1,167,256, none of which was reported on a Form 1099-K. Taxable interest was $89. The company has no beginning or ending inventory. They received other income of $105 from their new resume service. There was also net capital gain income. The sales are listed below.
Description
Date Acquired
Date Sold
Sales Price
Cost or Other Basis
AOL
05/16/2000
08/24/20XX
$58,000
$37,258
IBM
01/23/1995
06/15/20XX
$35,452
$21,682
HPQ
08/31/2003
12/16/20XX
$68,745
$53,257
The expenses are listed below.
Signing bonuses .................$1,016,186 Advertising ..............................$17,489 Bank charges ................................$901 Charitable contributions-cash ......$250 Commissions .............................$5,002 FDLE screen .............................$1,230
Fire safety.......................................$68 Gifts..............................................$869 HBV vaccinations ........................$270 Insurance-liability ...................$10,713 Legal/professional .....................$1,962 Licenses/permits .......................$1,243
Corporation Workshop Return 1 Meals (to be reduced)...................$353 Medical waste ..............................$277 Nondeductible ...........................$2,759 Office expenses .........................$4,693 Postage ......................................$2,347 Printing......................................$4,718 Rent .........................................$40,403 Repairs/maintenance .................$4,761 Security ........................................$493 Supplies ...................................$21,639 Federal income tax ....................$3,028 Other tax.......................................$844
The corporation also has several assets being depreciated. The corporation is exempt from alternative minimum tax, but continues performing the calculations. The information on these assets is below:
Placed in Service
Description
Cost
Equipment
01/01/2002 $20,000
Equipment
01/01/2003
$1,581
Equipment
01/01/2007
$1,081
Equipment
01/01/2006
$8,523
Equipment
01/01/2004
$159
Computer System
07/15/2009 $20,824
Software
07/15/2009 $14,000
Furniture
11/18/2009
$1,662
Leasehold 07/01/2009 Improvements
$2,569
Software
04/24/2012
Telephone ..................................$7,882 Training/seminars ........................$653 Transportation ...........................$1,041 Travel ........................................$5,914 Utilities......................................$3,956
$1,700
Prior Prior Recovery Prior AMT Section Method Convention Period Depreciation Depreciation 179 MACRS/ HY 7 $20,000 $20,000 200DB MACRS/ HY 7 $1,581 $1,581 200DB MACRS/ HY 7 $936 $882 200DB MACRS/ HY 7 $8,143 $8,001 200DB MACRS/ HY 7 $159 $159 200DB MACRS/ HY 5 $17,226 $15,620 200DB MACRS/ FM 3 $14,000 $14,000 SL MACRS/ HY 7 $1,143 $949 200DB MACRS/ HY 15 $790 $790 150DB MACRS/ FM 3 $992 $992 SL
Last year, the corporation had an NOL (Net Operating Loss) carryover of $45,454 from losses incurred last year.
Corporation Workshop Return 1
The rules of section 263A do not apply to property that is produced or acquired for resale, and there was no change in determining quantities, cost, or valuations between opening and closing inventory. Gilbert Manson (SSN 321-XX-XXXX), Treasurer, is the only officer that the corporation compensated this year. Gilbert received $10,000 for the 50% of his time that was devoted to business. He owns no stock. They use the cash method of accounting. For Schedule K, the answer to all of the questions is “no” except for question 4b, 15a, and 15b. Wallace Stone (SSN 322-XX-XXXX) and Rita Wilkins (SSN 323-XX-XXXX) each owned 50% of the corporation’s voting stock. At the end of this year, Support Staffing had cash assets of $34,451, and loans to the shareholders totaled $2,179. Tax-exempt securities total $19,844. They have capital preferred stock of $600. At the beginning of the year, the corporation had $28,780 in cash, loans to shareholders totaled $1,599, the cost of depreciable assets was $56,399, and the accumulated depreciation was $49,978. Their intangible assets (computer software) cost $15,700, with $14,992 accumulated amortization. Various investments were $1,000 of the company’s assets at the beginning of the year, but none remained at the end of the year. Also at the beginning of the year, they still owed $15,600 on the mortgage, had $600 in preferred capital stock all year, and had unappropriated retained earnings of $22,308. They made cash distributions of $4,811. The corporation does qualify for the small business exemption for alternative minimum tax. They made timely estimated tax payments of $175 per quarter. The corporation would like to electronically file this return. They want to have any refund mailed to them, and will mail any balance due. Wallace Stone will sign the return. His PIN is 23456. He wants to enter it himself. Wallace is the president, and his business telephone number is (706) 555-4321. He wants to list this phone number on the return.
Corporation Workshop Return 2 Title: Summary:
Corporation Workshop Return 2 In this lesson, you will learn the following: 1. Create a Form 1120; 2. Complete Form 4562, Depreciation and Amortization, with multiple depreciation worksheets; 3. Elect to forgo carryback of net operating loss; 4. Paper file the corporate return.
Average completion time: 1 hour, 30 minutes Steps for Corporation Workshop Return 2
Start a new return using 30-2XXXXXX. Use your company’s EFIN for “XXXXXX”. Use 11-1111111 as the EIN only if you plan to practice electronically filing these returns through the ATX Training Electronic Filing Center. Otherwise, use a unique number agreed upon by your company.
Rome Jewelry Exchange, which operates retail sales in jewelry, would like you to prepare their corporation return. They incorporated on August 30, 1991, and are located at 1789 River Road, Rome, GA 30161. Gross receipts for the year were $511,323, none of which was reported on Form 1099-K. The company also received interest in the amount of $12,051 during the year. The company made inventory purchases of $346,426 during the year, and paid $4,888 for labor pertaining to inventory. The inventory at the beginning of the year was $255,127, and at the end of the year it was $251,742. They use the cost method to value inventory. Section 263A rules do not apply to property that is produced or acquired for resale, and there was no change between valuing beginning and ending inventory for the year. The expenses for the business are listed below.
Repairs and maintenance ...............$70 Rent .........................................$22,117 Taxes and licenses.....................$8,406 Advertising ..............................$13,842 Automobile expense.....................$450 Bank charges .............................$1,504 Computer expenses ...................$1,785 Dues ..........................................$1,036
Insurance-liability ...................$11,682 Legal fees ..................................$5,414 Office expenses .........................$2,265 Postage ......................................$2,269 Security .....................................$1,474 Utilities......................................$4,635 Bonds/permits/licenses ................$175
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Corporation Workshop Return 2
Description
The corporation also depreciated several items. The corporation is exempt from alternative minimum tax, but continues performing the calculations. These are listed below.
Placed in Service
Cost
DVD Drive 09/30/2004
$296
Network 07/30/2009 Equipment
$944
Tools
02/09/2010
$323
Computer 12/31/2010 $1,789 Tools
01/09/2011
$224
Desk
06/01/2011
$781
Prior Prior Recovery Prior AMT Section Method Convention Period Depreciation Depreciation 179 MACRS/ HY 5 $296 $296 200DB MACRS/ HY 5 $890 $865 200DB MACRS/ MQ 7 $235 $200 200DB MACRS/ MQ 5 $1,422 $1,239 200DB MACRS/ HY 7 $126 $101 200DB MACRS/ HY 7 $439 $350 200DB
There were two officers who were compensated. Stephanie Lambert, who owns 77% of the corporation’s common stock, was compensated $57,300 during the year. Her Social Security number is 304-XX-XXXX. Lonnie Holcomb owns 23% of the common stock and was compensated $39,000. His Social Security number is 305-XX-XXXX. They both devoted 100% of their time to the business. They use the cash method of accounting. For Schedule K, the answer to question 4b is “Yes.” If applicable, the corporation wants to make the election on Line 11. All of the other questions should be answered “No” except for question 13, which you will need to decide. At the beginning of the year, the corporation had $82,376 in cash, depreciable assets totaled $4,357, and depreciation taken was $3,408. Accumulated depreciation was $3,408. They also had other various assets in the amount of $2,090. Cash at the end of the year was $68,660, and other assets remained the same. They did have one additional asset, a loan to a customer of $163. Various current liabilities were $2,976 at the beginning of the year, and dropped to $1,376 by the end of the year. The company did have the same amount of common capital stock all year $110,000.
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Corporation Workshop Return 2
Appropriated retained earnings were $243,514 at the beginning of the year and were $232,925at year end. Unappropriated retained earnings at the beginning of the year were $(15,948). The corporation wants to make the election to forgo the carryback of a net operating loss. The corporation does not want to electronically file this return.
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Corporation Return 3, Lesson 1 Title: Summary:
Corporation Workshop Return 3 In this lesson, you will learn the following: 1. Create a Form 1120; 2. Complete Form 4562, Depreciation or Amortization, with multiple depreciation worksheets; 3. Complete the 2011 Estimated Tax Payments worksheet; 4. Paper file the corporate return.
Average completion time: 45 minutes Steps for Corporation Workshop Return 3
Start a new return using 30-3XXXXXX. Use your company’s EFIN for “XXXXXX”. Use 11-1111111 as the EIN only if you plan to practice electronically filing these returns through the ATX Training Electronic Filing Center. Otherwise, use a unique number agreed upon by your company.
Simpson’s Allergy Clinic would like for you to prepare this year’s corporate return. Their address is 2 Field Place, Rome, GA 30164. They were incorporated on November 18, 1980. The gross receipts for the year were $3,876,569. The corporation received interest of $705. The expenses are listed below.
Advertising ................$600,000 Interest...........................$6,174 Pension plans ..............$79,170 Rent ...........................$295,998 Repairs ........................$21,743
Salaries ...................$1,336,517 Officers’ salaries ....$1,133,164 State income tax ...............$339 Other taxes ................$124,218
The corporation also depreciated some items. The corporation is exempt from alternative minimum tax, but continues performing the calculations. These are listed below.
Placed in Description Service Computer
05/01/2009
Phone/fax
08/01/2010
Computer 06/30/2011 equipment Furniture
06/30/2012
Prior Recovery Prior AMT Cost Method Convention Period Depreciation Depreciation MACRS/ $8,583 HY 5 200DB MACRS/ $3,769 HY 7 200DB MACRS/ $18,494 HY 5 200DB MACRS/ $15,071 HY 7 $5,845 $4,497 200DB
Prior Section 179 $8,583 $3,769 $18,494
Corporation Workshop Return 3
There were four officers who were compensated during the year. Robert Bonden SSN 306-XX-XXXX, Mary Rhine – SSN 307-XX-XXXX, Joseph Wilson – SSN 308-XX-XXXX, and Mark White – SSN 309-XX-XXXX. Each of them devoted 100% of their time to the business, own 25% of the common stock, and received $283,291 during the year. The corporation uses the cash method of accounting. All of the questions on Schedule K should be answered “no” except for question 4b. The corporation had, at the beginning of the year, cash of $40,863 and tax-exempt securities of $7,894. There were also depreciable assets totaling $45,917, with $36,691 taken in depreciation. Also, at the beginning of the year, the corporation had common capital stock of $1,000, additional paid-in capital of $42,319, and unappropriated retained earnings of $14,664. At the end of the year, the corporation had $66,093 in cash and tax-exempt securities of $7,360. Also, $1,000 in common capital stock, $36,276 in additional paid-in capital. Out of the unappropriated retained earnings, $200,321 was distributed in cash, and $48,891 in stock was distributed. The corporation made 4 timely estimated tax payments of $21,000 each. Last year’s tax was $86,500. The corporation would like to paper file this return.
Corporation Workshop Return 4 Title: Summary:
Corporation Workshop Return 4 In this lesson, you will learn the following: 1. Create a Form 1120; 2. Enter the Estimated Tax Payments worksheet; 3. Complete Form 4562, Depreciation and Amortization, with multiple depreciation worksheets; 4. Paper file the corporate return.
Average completion time: 45 minutes Steps for Corporation Workshop Return 4
Start a new return using 30-4XXXXXX. Use your company’s EFIN for “XXXXXX”. Use 11-1111111 as the EIN only if you plan to practice electronically filing these returns through the ATX Training Electronic Filing Center. Otherwise, use a unique number agreed upon by your company.
River Rentals, Inc., (EIN 30-4XXXXXX) would like to file this year’s return. The company was incorporated on January 1, 1976, and leases commercial space. The address is 16407 Willow Drive, Clarkdale, GA 30111. They received rent during the year of $299,768 and interest of $612. Expenses are listed below.
Accounting ..............................$300 Bank charges ...............................$2 Building repairs ..................$56,503 Director fees .......................$11,000 Health insurance...................$9,568 Insurance-liability ................$2,509 Landscaping .........................$1,162 Miscellaneous .........................$305 Office expenses .......................$149
Payroll taxes .........................$6,382 Postage ....................................$100 Repairs/maintenance ...............$222 Officers’ salaries ................$91,000 Other taxes .........................$59,987 Tax service ..............................$548 Travel ......................................$481 Utilities....................................$685
The corporation also has assets that are being depreciated. The corporation is exempt from alternative minimum tax, but continues performing the calculations. These are listed below. (Replace “XX” with the current year.)
Prior Prior Recovery Prior AMT Section Cost Method Convention Period Depreciation Depreciation 179 MACRS/ $92,715 02/01/1993 $177,655 MM 31.5 $117,734 SL MACRS/ $15,208 06/01/1994 $31,129 MM 31.5 $19 ,312 SL MACRS/ 07/01/2006 $34,725 HY 7 $34,725 $34,725 200DB
Placed in Description Service Building Building addition Furniture
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Corporation Workshop Return 4
Description
Placed in Service
Cost
HVAC
06/12/2007
$6,734
Chair
07/01/2007
$205
Roof
11/06/2008 $17,375
Computer
07/01/2011
$3,243
Printer
12/11/2013
$589
Electrical 07/03/20XX $4,833 upgrade Plumbing 07/25/20XX $3,355 upgrade
Prior Prior Recovery Prior AMT Section Method Convention Period Depreciation Depreciation 179 MACRS/ MM 39 $1,130 $1,130 SL MACRS/ HY 7 $205 200DB MACRS/ MM 39 $2,283 $2,283 SL MACRS/ HY 5 $3,243 200DB MACRS/ MQ 5 $589 200DB MACRS/ MM 39 SL MACRS/ MM 39 SL
The corporation uses the cash method of accounting. For Schedule K, the answer to question 4b is “Yes.” If applicable, the corporation wants to make the election on Line 11. All of the other questions should be answered “No” except for question 13, which you will need to decide. The company has 3 stockholders. There is one who owns most of the company’s stock. Harry Green, whose Social Security number is 310-XX-XXXX, owns 85% of the voting stock. He received cash distributions of $80,000 during the year and a salary of $91,000. At the beginning of the year, River Rentals, Inc. had cash of $31,559 and taxexempt securities of $5,850. Depreciable assets were $271,655, with accumulated depreciation of $159,909 They also had land worth $125,060. They had common stock of $14,477, additional paid-in capital of $7,537, and unappropriated retained earnings of $252,201. At the end of the year, the company had cash of $47,708. Tax-exempt securities were $1,000, and utility deposits were $1,020. Also at the end of the year, the company had loans from shareholders of $50,000 and common stock of $10,326. Additional paid-in capital was $2,718. The corporation made four timely estimated tax payments of $250 each. Federal income tax in the amount of $4,819 was paid last year. The corporation will mail this return.
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Corporation Workshop Return 5 Title: Summary:
Corporation Workshop Return 5 In this lesson, you will learn the following: 1. Create a Form 1120; 2. Enter net operating loss carryforward from a prior year; 3. Complete Form 4562, Depreciation and Amortization with multiple depreciation worksheets; 4. Prepare the Election Not to Claim Special Depreciation statement; 5. Paper file the corporate return.
Average completion time: 30 minutes Steps for Corporation Workshop Return 5
Start a new return using 30-5XXXXXX. Use your company’s EFIN for “XXXXXX”. Use 11-1111111 as the EIN only if you plan to practice electronically filing these returns through the ATX Training Electronic Filing Center. Otherwise, use a unique number agreed upon by your company.
Creative Consulting, Inc., a consulting and painting service, is located at 1630 Wood Drive, Centre, AL 35960. They were incorporated on January 1, 2002. Gross receipts for the year are $290,102. Expenses are listed below.
Wages ............................$5,000 Repairs .............................$738 Rents .............................$1,296 Taxes and licenses.........$8,009 Interest..................................$9 Charitable contributions $2,996 Advertising ....................$9,120 Automobile expense....$11,621 Bank charges ....................$218 Subscriptions ....................$591 Insurance-liability .......$11,514
Legal fees ......................$1,098 Licenses..............................$60 Meals (50%) .....................$996 Office expense ..............$1,567 Outside service ............$88,683 Postage .............................$147 Printing.............................$174 Supplies .......................$35,604 Telephone ......................$6,479 Travel .................................$55 Utilities.............................$744
The company also has several depreciated assets. (Use current year for “XX”). They do not want to take any current year Section 179 or special depreciation deductions. The corporation is exempt from alternative minimum tax, but continues performing the calculations.
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Corporation Workshop Return 5
Placed in Description Service Cost Method Printing MACRS/ 02/24/2008 $1,708 Equipment SL Office MACRS/ 11/15/2008 $650 Furniture SL MACRS/ Color Printer 12/31/2008 $483 SL MACRS/ Laser Printer 01/12/2009 $977 SL MACRS/ Scan/Monitor 07/01/2010 $837 SL Painting MACRS/ 01/20/2010 $904 Equipment SL 5 Hub MACRS/ 05/17/2011 $458 Network SL MACRS/ Scan/Monitor 02/09/2011 $565 SL Desktop MACRS/ 01/01/2011 $2,665 Computer SL MACRS/ E Machine 05/17/2012 $899 200DB MACRS/ Paint Sprayer 02/17/2012 $750 200DB Desktop MACRS/ 11/20/2012 $3,094 Computer 200DB MACRS/ Paint Sprayer 11/01/20XX $901 200DB
Convention
Prior Prior Recovery Prior AMT Section Period Depreciation Depreciation 179
HY
5
$1,708
HY
7
$650
HY
5
$483
HY
5
$977
HY
5
$586
$586
HY
7
$452
$452
HY
5
$458
HY
5
$565
HY
5
MQ
5
MQ
7
$348
$271
MQ
5
$1,330
$1,010
MQ
7
$1,333
$1,333 $899
There is one item, Organization costs, that has been amortized. The amortization began on 01/01/2002. The costs were $349, amortized over 5 years. Prior year amortization is $349. The corporation had an NOL carryover from two years ago of $8,764, and one from last year of $22,565. There are two officers who were compensated this year. Both of them devote 100% of their time to the business. Amanda Wilson, Social Security number 311-XX-XXXX, owns 50% of the corporation’s common stock and was paid $51,250. Harriet Potts, Social Security number 312-XX-XXXX, also owns 50% of the common stock. She was compensated $39,960. The corporation uses a modified accrual method of accounting. 2
Corporation Workshop Return 5
The answers to all of the questions on Schedule K should be “no” except for question 4b, which should be answered “yes”. At the beginning of the year, the corporation had $2,022 in cash and $18,115 in loans to shareholders. Advances to employees totaled $1,737, and deposits were $1,220. The acquisition cost of depreciable assets was $13,990, and $9,789 of that had been depreciated. Intangible assets of $349 are fully amortized. Liabilities included accounts payable of $4,341, capital common stock of $1,000, unappropriated retained earnings of $19,381, and various other liabilities of $2,573. At the end of the year, cash was $13,584 and loans to shareholders were $18,115. Accounts payable was $4,247, and capital common stock was $1,000. The corporation does not want to electronically file this return.
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