Question

Madeleine, a shareholder, owned 32% of Shadow Ridge's stock for 26 days and 40% for the remaining 339 days in the year. Using the per-day allocation method, compute Madeleine's share of the following S corporation items. Assume 365 days in a year. In your computations, round the per-day allocation to two decimal places and use in subsequent computations. Do not round other computations. If required, round your final answers to the nearest dollar.

Schedule K Totals Madeleine's Schedule K–1 Totals

Ordinary income $810,000 $ _________________   

Tax-exempt interest $14,000 $_______________________

Charitable contributions $8,000 $____________________

Answer 1

a . ordinary income total

= [ 810000 * 32 % * 26 / 365 ] + [ 810000 * 40 % * 339 / 365 ]

= [ 259200 * 26 / 365 ] + [ 324000 * 339 / 365 ]

= 18436 + 300920

= 319356

tax - exempt interest   

= [ 14000 * 32 % * 26 / 365 ] + [ 14000 * 40 % * 339 / 365 ]

= [ 4480 * 26 / 365 ] + [ 5600 * 399 / 365 ]

= 319 + 6121

= 6440

charitable contributions

= [ 8000 * 32 % * 26 / 365 ] + [ 8000 * 40 % * 339 / 365 ]

= [ 2560 * 26 / 365 ] + [ 3200 * 339 / 365 ]

= 182 + 2972

= 3154