Catbird taxable income, Janice is the sole owner of Catbird

Catbird taxable income

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Reference no: EM13756777

Janice is the sole owner of Catbird Company. In the current year, Catbird had

Operating income of $100,000

A long-term capital gain of 15,000

A short-term capital loss of -17,500

Dividend income of (stock owned = 2%) 8,000

A charitable contribution of 5,000

Distribution to Janice of 70,000

Catbird is a regular domestic corporation and is not a professional service corporation.

How much is Catbird's taxable income? Show your work.

Can you definitively say that the distribution to Janice was a dividend? Yes or no. Explain.

Catbird paid a salary of $300,000 to Janice to serve as CEO. If the IRS proposes that this salary is excessive and no more than $175,000 can possibly be justified, what will be the result to Catbird and Janice? Explain.

Assuming taxable income was $55,000, how much is Catbird"s federal income tax for the year? Show your work

Reference no: EM13756777

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