tax return project

Corporations & Partnerships, Summer6Wk1, 2021

TAX RETURN PROJECTS

Due Dates:

C Corp –
See Syllabus

S Corp –
See Syllabus

Partnership –
See Syllabus

The tax return projects consists of preparing a C corporation return, part of an S corporation return, and part of a partnership return. These returns are drawn from problems 4, 6, and 5 in Appendix E of South-Western’s Federal Taxation Comprehensive Volume (2021) with the following additional information. Use 2020 forms. For online courses, please make every effort to submit the tax return in one pdf or Word document. (Even if you use a software program, you must turn in manual entries on IRS forms. That is, for example, numbers may be written on printed IRS forms which are then scanned or numbers may be typed into IRS forms and saved.)

Change Problems: Change all year ends to one year later; that is, for example, 2019 becomes 2020.

C Corporation Tax Return: Comprehensive Problem (Kingfisher Corporation) Appendix E

The following information should be helpful in your preparation of the tax return.

Requirements

Prepare the federal income tax return on the appropriate IRS forms. (Even if you use a software program, you must turn in manual entries on IRS forms.) Copies of those forms and instructions are available at www.irs.gov. Form 1125-A is required if there is inventory. You will need to prepare pp. 1-6 of the 1120. Also prepare Form 1125-E and Schedule G if necessary. You will not need to prepare (insufficient detail) Form 4562. Please prepare M-1 instead of M-3.

Additional Requirements

Prepare a brief top sheet summarizing the factual information in the format of the tax formula.

Strategy

You might want to start with page 1 of the 1120 and manually make entries (Pencil recommended). You might also want to work out the figures for the tax formula roughly first before beginning the return.

Check Figures

Taxable Income, L. 30 508,000; M-1 line 1 397,320; M-1, line 10 514,000

Check forms: (please include in your return).

Schedule L is book basis, not tax basis.

Grading

Per the syllabus, manual return is 33 points, plus 10 points extra credit.

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S Corporation Return:

Comprehensive Problem (Premium, Inc.)

Required

Prepare Schedule K, M-1, M-2, K-1 (K-1 for George Smith)

Additional Information

1120S page 1 line 21 ordinary business income 639,574

Schedule L

Schedule K complete to following lines:

1, 4, 12a, 16c, 16d, 17a, 18

K-1 (George Smith) complete K-1, including the following lines:

1, 4, 12a, 16c, 16d, 17a, 17v (17v is QBI deduction information: QBI, W-2 wages (given in the problem), UBIA)
Schedule M-2 – line 8
(a)
715,722
(b) 0 (c ) 0 (d) 0

Lines 3 & 5 (a) have separately stated and nondeductibles

Schedule M-2 line 1: (a) 111,148
Schedule M-1 line 1: 704,574; Line 8: 719,574

Partnership return:

Comprehensive Problem (ROCK the Ages LLC), Appendix E

Required

Prepare Schedule K, M-1, M-2 (book basis), K-1 (Ryan Ross). Please prepare M-1 rather than M-3.

Additional Information

1065 page 1 line 22 ordinary business income 979,200; Schedule L is book basis.
Schedule K, complete the following lines:

1, 4a&c, 5, 8, 9a, 12, 13a, 14a, 14c, 18a, 18c, 19a, 20a

Schedule K-1 (Ryan Ross) complete K-1, including the following:

1, 4a&c, 5, 8, 9a, 12, 13a, 14a, 14c, 18a, 18c, 19a, 20a, 20z (20z is QBI deduction information: QBI, W-2 wages, UBIA)
M-1 line 1
840,000

line 9

2,336,800
M-2 line 1
800,000

line 9

640,000

Grading Policy

Grades:
Per the syllabus, the project is worth approximately 12% of the grade; e.g., 63 points since the four exams are worth 300 points total. It is anticipated that the C corporation return will be 33 points, the S corporation return 15 points, and the partnership return 15 points. It is anticipated there will be extra credit points in the returns of 10, 5, and 5.