Question

3-2 OFL DC has the following income (loss) for Years 1 and 2: Year 1 General...

3-2 OFL

DC has the following income (loss) for Years 1 and 2:

Year 1

General Limitation Income:

$100 US Source

($100 Foreign Source)

Passive Income:

$30 US Source

$10 Foreign Source

Year 2

General Limitation Income:

$100 US Source

$60 Foreign Source

Passive Income:

$10 US Source

$10 Foreign Source

What is DC's income for both years and what source (US or foreign) is the income? How do you account for the loss?

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

General category income is the income that a business earns from its core activities (be it foreign or domestic source). For eg, a Income of a Shoe maker company by selling shoes in the home country as well as income from exports is considered as Operating income.

Passive income includes Interest, Dividends, Rents, Royalties, Gains from sale and exchange, Income inclusions relating to passive foreign investment companies (PFIC), which are qualifying electing funds (QEFs). Basically not related to the core business activity of the firm.

Operating Income Total Income
year General General + Passive
1 100-100= 0 0+30+10= 40
2 100+60= 160 160+10+10= 180

Loss in 1st yr in general limitation category is basically adjusted in the operating loss only (conditions what type of foreign income is it)

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
1.- Determine the overall income or loss of STA Ltd, a publicly traded partnership, given the...
1.- Determine the overall income or loss of STA Ltd, a publicly traded partnership, given the following current-year amounts: $6,000 income, $2,500 in deductions, and $650 prior-year unallowed losses. A.- $650 gain. B.- $2,500 gain. C.- $2,850 gain. D.- $6,000 gain. 2.- How should a partner's passive loss, passive income, nonpassive loss and nonpassive income be categorized or identified on the partner's Schedule K-1 (Form 1065)? A.- Guaranteed payments. B.- Net rental real income (loss). C.- Ordinary Business income (loss)...
The concept of passive activity loss limitations including: 1. Why were the passive loss rules enacted?...
The concept of passive activity loss limitations including: 1. Why were the passive loss rules enacted? What problem were they trying to solve? 2. To whom do the passive loss rules apply and what makes an activity passive or not passive? 3. What is the treatment of losses that are not allowed to be deducted in the current year? 4. How does material participation (or lack thereof) affect passive activity loss deductions? How is material participation achieved?
Nash Corporation has pretax financial income (or loss) equal to taxable income (or loss) from 2009...
Nash Corporation has pretax financial income (or loss) equal to taxable income (or loss) from 2009 through 2017 as follows: Income (Loss) Tax Rate 2009 $41,180 30 % 2010 56,800 30 % 2011 24,140 35 % 2012 68,160 50 % 2013 (213,000 ) 40 % 2014 127,800 40 % 2015 42,600 40 % 2016 149,100 40 % 2017 (85,200 ) 45 % Pretax financial income (loss) and taxable income (loss) were the same for all years since Nash has been...
Ivy Corp. has the following operating data for the past 2 years: Year 1 Year 2...
Ivy Corp. has the following operating data for the past 2 years: Year 1 Year 2 Return on Investment 10% 40% Residual Income $600 ? Required Rate of return 8% 10% Average operating assets ? $42,000 Sales in year 2 is $60,000 more than sales in year 1. The Company had the same capital turnover in both years. (Q): What is the sales margin in Year 2? Use two decimal places in the answer (for example, if the answer is...
The company FPA has the following income, expense, and loss items for the current year. Sales...
The company FPA has the following income, expense, and loss items for the current year. Sales $850,000 Tax-exempt interest $40,000 Long-term capital gain $85,000 Short-term capital loss $35,000 Passive activity loss $20,000 Cost of goods sold $480,000 Depreciation $40,000 Section 179 expense $50,000 Other operating expenses $200,000 Net operating loss (from previous year) $24,000 Prepare a calculation of taxable income for the following scenarios and indicate the tax form(s) to report the business activity: Corporation Owned by Kim
The company FPA has the following income, expense, and loss items for the current year. Sales...
The company FPA has the following income, expense, and loss items for the current year. Sales $850,000 Tax-exempt interest $40,000 Long-term capital gain $85,000 Short-term capital loss $35,000 Passive activity loss $20,000 Cost of goods sold $480,000 Depreciation $40,000 Section 179 expense $50,000 Other operating expenses $200,000 Net operating loss (from previous year) $24,000 Prepare a calculation of taxable income for the following scenarios and indicate the tax form(s) to report the business activity: S Corporation owned equally by Henry,...
1. What is the probability that a 100-year flood will occur within 100 years? 2. What...
1. What is the probability that a 100-year flood will occur within 100 years? 2. What is the probability that the 100 year flood will occur in 30 years? 3. What is the probability that the 10 year flood will occur in 30 years? 4. what is the probability that the 500 year flood will occur in 10 years?
Sundahl Company Income Statements For the Years 1 and 2 1 Year 1 Year 2 2...
Sundahl Company Income Statements For the Years 1 and 2 1 Year 1 Year 2 2 Sales $2,004,000.00 $1,802,000.00 3 Less: Cost of goods sold (1,402,000.00) (1,200,000.00) 4 Gross margin $602,000.00 $602,000.00 5 Less operating expenses: 6 Selling expenses $(292,000.00) $(292,000.00) 7 Administrative expenses (110,800.00) (119,700.00) 8 Operating income $199,200.00 $190,300.00 9 Less: 10 Interest expense (49,200.00) (40,300.00) 11 Net income before taxes $150,000.00 $150,000.00 Required: Prepare a common-size income statement for Year 2 by expressing each line item for...
Molly Grey (single) acquired a 30 percent limited partnership interest in Beau Geste LLP several years...
Molly Grey (single) acquired a 30 percent limited partnership interest in Beau Geste LLP several years ago for $61,000. At the beginning of year 1, Molly has tax basis and an at-risk amount of $32,500. In year 1, Beau Geste incurs a loss of $194,500 and does not make any distributions to the partners. In year 1, Molly's AGI (excluding any income or loss from Beau Geste) is $67,000. This includes $17,600 of passive income from other passive activities. In...
Consider the following two projects: Project Year 0 Cash Flow Year 1 Cash Flow Year 2...
Consider the following two projects: Project Year 0 Cash Flow Year 1 Cash Flow Year 2 Cash Flow Year 3 Cash Flow Year 4 Cash Flow Discount Rate A -100 40 50 60 N/A .15 B -73 30 30 30 30 .15 Calculate the NPV of both projects. Which project would you accept? If interest rates are now down to 13%, what are the new NPVs?
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT