Reference no: EM131765562

Rachael Ray, Paula Deen and Gordon Ramsay each own one-third of the common stock of Celebrity Catering Services, Inc. (CCS). CCS was incorporated on February 2, 2009. It has only one class of stock outstanding and operates as a C corporation for tax purposes. CCS caters to all types of social events.

• CCS is located at 540 Waverly Way Burbank, CA 91501
• Its employer ID is 38-4743474
• CCS's business activity is catering food services. Its business activity code is 722300.
• The shareholders also work as officers for the corporation as follows:

o Rachael is the chief executive officer and president, (SS# 231-54-8976). Her salary this year is $180,000.

o Paula is the executive VP and Chief operating officer (SS#798-56-3241). Her salary this year is $120,000.
o Gordon is the VP of Finance (SS# 879-21-4536). His salary this year is $150,000.
• All officers devote 100% of their time to the business and all of the officers are US citizens.
• CCS uses the accrual method of accounting and has a calendar year-end.
• CCS made four equal quarterly estimated tax payments of $36,500 each. Its tax liability last year was $125,800. If it has overpaid its federal tax liability, CCS would like to receive a refund.
• In the prior year, the company made a large charitable contribution. $43,000 of that contribution exceeded the amount deductible and was carried forward to the current year.
• CCS paid a dividend of $30,000 to each of its shareholders on November 1. CCS had ample earnings and profits (E&P) to absorb the distribution.