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    An S corporation's profit and loss statement shows net profits of $90,000(book income).

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    2.
    An S corporation's profit and loss statement shows net profits of $90,000(book income). The corporation has three equal shareholders. From supplemental data, you obtain the following information about some items that are included in the $90,000.

    Selling expenses (21,200)
    Municipal bond interest income 2,000
    Dividends received on IBM stock 9,000
    $ 1231 gain 6,000
    $ 1245 gain 13,000
    Recovery of bad debt 4000
    Long term capital loss (9,000)
    Salary paid to owners (each) (11,000)
    Cost of goods Sold (97,000)

    - Determine nonseparately computed income or loss.
    - What would be the portion of taxable income or loss for Chang, one of the three shareholders?

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    Solution Preview

    The separately stated items are:

    Municiple interest income 2,000
    Dividends 9,000
    Sec 1231 gain 6,000
    Long term capital loss ...

    Solution Summary

    An S corporation's profit and loss statement shows net profits of $90,000(book income). The corporation has three equal shareholders. From supplemental data, you obtain the following information about some items that are included in the $90,000.

    $2.49

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