FICA and/or self-employment tax
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- Dave and his friend Stewart each owns 50 percent of KBS. During the year, Dave received $96,000 compensation for services he performed for KBS during the year. He performed a significant amount of work for the entity, and he was heavily involved in management decisions for the entity (he was not a passive investor in KBS). After deducting Dave's compensation, KBS reported taxable income of $38,400. How much FICA and/or self-employment tax is Dave required to pay on his compensation and his share of the KBS income if KBS is formed as a C corporation, an S corporation, or a limited liability company (taxed as a partnership) (ignore the 0.9 percent additional Medicare tax)? How much FICA tax would the entity be required to pay on the compensation paid to Dave? Note: Do not round any percentage calculations. Round other intermediate calculations and final answers to the nearest whole dollar amount. C Corporation S Corporation Limited liability company FICA Tax that Dave pays FICA Tax that…Dave and his friend Stewart each owns 50 percent of KBS. During the year, Dave receives $91,000 compensation for services he performs for KBS during the year. He performed a significant amount of work for the entity, and he was heavily involved in management decisions for the entity (he was not a passive investor in KBS). After deducting Dave’s compensation, KBS reports taxable income of $36,400.How much FICA and/or self-employment tax is Dave required to pay on his compensation and his share of the KBS income if KBS is formed as a C corporation, an S corporation, or a limited liability company (ignore the 0.9 percent additional Medicare tax)? (Do not round any percentage calculations. Round other intermediate calculations and final answers to the nearest whole dollar amount.) A. C Corp B. S Corp C. LLCDuring the year, Mark reports $90,000 of active business income from his law practice. He also owns two passive activities. From Activity A, he earns $20,000 of income, and from Activity B, he incurs a $30,000 loss. As a result, Mark a. reports AGI of $80,000. b. reports AGI of $90,000 with a $10,000 passive loss carryover. c. reports AGI of $90,000 with a $30,000 passive loss carryover. d. reports AGI of $110,000 with a $30,000 passive loss carryover.
- Hadley and Huxley each owns 50 percent of Triple H. During the year, Huxley received $86,400 compensation for services he performed for Triple H during the year. He performed a significant amount of work for the entity, and he was heavily involved in management decisions for the entity (he was not a passive investor in Triple H). After deducting Huxley's compensation, Triple H reported taxable income of $39,600. How much FICA and/or self-employment tax is Huxley required to pay on her compensation and his share of the Triple H income if Triple H is formed as an LLC (taxed as a partnership)? CORRECT ANSWER IS 15,006 (show steps to show how)Dave and his friend Stewart each owns 50 percent of KBS. During the year, Dave receives $75,000 compensation for services he performs for KBS during the year. He performed a significant amount of work for the entity, and he was heavily involved in management decisions for the entity (he was not a passive investor in KBS). After deducting Dave's compensation, KBS reports taxable income of $30,000. How much FICA and/or self-employment tax is Dave required to pay on his compensation and his share of the KBS income if KBS is formed as a C corporation, an S corporation, or a limited liability company (taxed as a partnership) (ignore the 0.9 percent additional Medicare tax)? (Do not round any percentage calculations. Round other intermediate calculations and final answers to the nearest whole dollar amount.) C Corporation S Corporation Limited liability companyMing and Denise, mother and daughter, operate a local restaurant as an LLC. The MD LLC earned a profit of $200,000 in the current year. Denise’s equal partnership interest was acquired by gift from Ming. Assume that capital is a material income-producing factor and that Ming manages the day-to-day operations of the restaurant without any help from Denise. Reasonable compensation for Ming’s services is $50,000. How much of the LLC’s income is allocated to Ming? What is the maximum amount of the LLC’s income that can be allocated to Denise? Assuming that Denise is 15 years old, has no other income, and is a dependent of Ming, how is Denise’s income from the LLC taxed?
- Watson Diggs and Paul Caine form Diamond Group LLC. Watson invests $1,000 into the Diamond Group and Paul invests $500. One of the Diamond Group’s vans was in an accident with Joe Doe who has sued the company for $1,000,000. Is Watson personally liable to Joe Doe for any of the $1,000,000 owed by the Company? Is Paul personally liable to Joe Doe for any of the $1,000,000 owed by the Company? Could Paul or Watson lose any part of their investment into the Company?Dave and his friend Stewart each owns 50 percent of KBS. During the year, Dave receives $91,000 compensation for services he performs for KBS during the year. He performed a significant amount of work for the entity, and he was heavily involved in management decisions for the entity (he was not a passive Investor in KBS). After deducting Dave's compensation, KBS reports taxable income of $36,400. How much FICA and/or self-employment tax is Dave required to pay on his compensation and his share of the KBS income if KBS is formed as a C corporation, an S corporation, or a limited liability company (ignore the 0.9 percent additional Medicare tax)? (Do not round any percentage calculations. Round other intermediate calculations and final answers to the nearest whole dollar amount.) C corporation S corporation Limited liability companyOn January 1, Year 1, Carrot, an individual, paid $24,000 for 5 percent of the stock in Root Corp., an S corporation. In November, he loaned $12,500 to Root Corp. in return for a promissory note. Root Corp. generated a $896,000 operating loss in Year 1. Required: How much of his share of the loss can Carrot deduct on his Year 1 return? Compute Carrot’s basis in his Root Corp. stock and his Root Corp. note at the end of Year 1.
- In 2000, Ms. Ennis, a head of household, contributed $45,000 in exchange for 450 shares of Seta stock. Seta is a qualified small business. This year, Ms. Ennis sold all 450 shares for $117,000. Her only other investment income was an $8,300 long-term capital gain from the sale of land. Her taxable income before consideration of her two capital transactions is $599,000. Assume the taxable year is 2023. Use Individual tax rate schedules and Tax rates for capital gains and qualified dividends. Required: a. Compute Ms. Ennis's income tax and Medicare contribution tax for the year. b. How would the computation change if Ms. Ennis acquired the Seta stock in 2011 instead of 2000? c. How would the computation change if Ms. Ennis acquired the Seta stock in 2020 instead of 2000? Answer is not complete. Complete this question by entering your answers in the tabs below. Required A Required B Required C Compute Ms. Ennis's income tax and Medicare contribution tax for the year. Note: Round your…In 2000, Ms. Ennis, a head of household, contributed $45,000 in exchange for 450 shares of Seta stock. Seta is a qualified small business. This year, Ms. Ennis sold all 450 shares for $117,000. Her only other investment income was an $8,300 long-term capital gain from the sale of land. Her taxable income before consideration of her two capital transactions is $599,000. Assume the taxable year is 2023. Use Individual tax rate schedules and Tax rates for capital gains and qualified dividends. Required: a. Compute Ms. Ennis's income tax and Medicare contribution tax for the year. b. How would the computation change if Ms. Ennis acquired the Seta stock in 2011 instead of 2000? c. How would the computation change if Ms. Ennis acquired the Seta stock in 2020 instead of 2000? > Answer is not complete. Complete this question by entering your answers in the tabs below. Required A Required B Required C Compute Ms. Ennis's income tax and Medicare contribution tax for the year. Note: Round your…Bob, a CPA, earns $200,000 from his accounting practice in the current year. He receives $25,000 in dividends and interest during the year as well as $10,000 of income from a passive activity. In addition, he incurs a loss of $65,000 from an investment in a passive activity, a $15,000 loss from a nonpassive activity ($10,000 at-risk basis), and a short-term capital loss of $20,000. What is Bob's AGI for the current year? 190,000 207,000 212,000 235,000