- The corporate tax return problem will be "Corporate Tax Return Problem 2" in Appendix C pages C-16 through C-18 of your book.
- Print these instructions before looking at the problem!
- Make sure you are using tax software that prepares year 2016 tax forms.
- Please use the software provided. If you have access to better tax software (if you work for a tax firm), you are welcome to use that. Do NOT use fillable pdf's from the IRS website - if you do you will have an automatic grade of zero!!! I can tell.
- Please make sure you have watched the Tegrity video that demonstrates how to use the TaxAct software and a few tips on preparing corporate tax returns.
- You'll need to use the forms listed in the instructions.
- Please go through the entire Form 1120 before you submit. There are many lines and checkboxes that are not "numbers." The main problem I have seen in the past, is students print the file from the computer and don't review it before submitting. Always review before submitting!!!
- Please submit a .pdf file of the return. File, Save Client Return as PDF, and then save as a PDF again to a location you can get to! Do NOT submit a backup of the software (.tc6 file). Doing so will result in an automatic grade of zero. It MUST be a pdf out of tax software!
Required Pages/Schedules -
Form 1120 pages 1 through 5
Forms 1125-A, 1125-E
Schedule D
Schedule G
If a form will not print automatically, go to File, Custom Print, and choose the form that way, and you should be able to save it as a pdf.
Check Figures -
Line 27 (Total deductions) = $1,301,500
Line 28 (Taxable income before NOL and special deductions) = $175,500
Line 35 (Overpayment) = $35,130
Please note, even if you get the correct taxable income on Page 1, make sure your balance sheet balances on Page 5. The only thing you should have to override is depreciation expense (Line 20 of Form 1120 = $28,000). Also, please review your pdf to ensure all questions with checkboxes have been appropriately answered. In tax, not only are the numbers important, but also the qualitative company information.
Corporate Tax Return Problem 2
Required:
- Complete Blue Catering Service Inc.'s (BCS) 2016 Form 1120, Schedule D, and Schedule G (if applicable) using the information provided below.
- Form 4562 for depreciation is not required. Include the amount of tax depreciation given in the problem on the appropriate line on the first page of Form 1120.
- Assume that BCS does not owe any alternative minimum tax.
- If any information is missing, use reasonable assumptions to fill in the gaps.
- The forms, schedules, and instructions can be found at the IRS website. The instructions can be helpful in completing the forms.
Facts:
Cara Siler, Janna Funk, and Valerie Cloward each own one-third of the common stock of Blue Catering Services Inc. (BCS). BCS was incorporated on February 4, 2009. It has only one class of stock outstanding and operates as a C corporation for tax purposes. BCS caters all types of social events throughout southern California.
- BCS is located at 540 Waverly Way, San Diego, California 92101.
- BCS's Employer Identification Number is 38-4743474. !Page C-11
- BCS's business activity is catering food and services. Its business activity code is 722300.
- The shareholders also work as officers for the corporation as follows:
- Cara is the chief executive officer and president (Social Security number 231-54-8976).
- Janna is the executive vice president and chief operating officer (Social Security number 798-56-3241).
- Valerie is the vice president of finance (Social Security number 879-21-4536).
- All officers devote 100 percent of their time to the business and all officers are U.S. citizens.
- BCS uses the accrual method of accounting and has a calendar year-end.
- BCS made four equal estimated tax payments of $20,000 each. Its tax liability last year was $70,000. If it has overpaid its federal tax liability, BCS would like to receive a refund.
- BCS paid a dividend of $30,000 to its shareholders on November 1. BCS had ample earnings and profits (E&P) to absorb the distribution.
Attachment:- Corporate Tax Return.rar