Question

Cathy is a 30% shareholder throughout the year in Goff, Inc., a calendar year S-Corp.

Sales	$210,000
COGS	$87,000
Depreciation Expense	$28,000
Administrative Expense	$10,000
1231 Gain	$15,000
1245 Gain	$12,000
STCL from sale of stock	$6,000
LTCL from sale of stock	$8,000
LTCG from sale of stock	$17,000
Charitable Contribution	$5,000

a. Calculate Cathy’s share of ordinary income.

b. Calculate Cathy’s share of separately stated items.

Answer 1

Cathy’s share of ordinary income
Particulars	Amount ($)
Sales	2,10,000
COGS	87,000
Depreciation Expense	28,000
Administrative Expense	10,000
1231 Gain	15,000
1245 Gain	12,000
	3,62,000
Cathy’s share of ordinary income.		$	1,08,600
(30% of 3,62,000)
Cathy’s share of separately stated items
STCL from sale of stock	6000
LTCL from sale of stock	8000
LTCG from sale of stock	17000
Charitable Contribution	-5000
	26,000
Cathy’s share of separately stated items		$	7,800
(30% of 26,000)