CB Corporation was formed as a calendar-year S corporation. Casey is a 60% shareholder and Bryant is a 40% shareholder. On September 30, 2014, Bryant sold his CB shares to Don. CB reported business income for 2014 as follows (assume that there are 365 days in the year): $$\begin{array} { | l | r | }
\hline { \text { Period } } & { \text { Income } } \
\hline \text { January } 1 \text { through September } 30 \text { (273 days) } & \$ 200,000 \
\hline \text { October } 1 \text { through December } 31 \text { (92 days } ) & 530,000 \
\hline \text { January } 1 \text { through December } 31 & \$ 730,000 \
\hline
\end{array}$$ How much 2014 income is allocated to each shareholder if CB uses its normal accounting rules to allocate income to the specific periods in which it was actually earned?

Question

CB Corporation was formed as a calendar-year S corporation. Casey is a 60% shareholder and Bryant is a 40% shareholder. On September 30, 2014, Bryant sold his CB shares to Don. CB reported business income for 2014 as follows (assume that there are 365 days in the year): $$\begin{array} { | l | r | } 
\hline { \text { Period } } & { \text { Income } } \
\hline \text { January } 1 \text { through September } 30 \text { (273 days) } & \$ 200,000 \
\hline \text { October } 1 \text { through December } 31 \text { (92 days } ) & 530,000 \
\hline \text { January } 1 \text { through December } 31 & \$ 730,000 \
\hline
\end{array}$$ How much 2014 income is allocated to each shareholder if CB uses its normal accounting rules to allocate income to the specific periods in which it was actually earned?

Quizplus · Accepted Answer

The Answer of CB Corporation was formed as a calendar-year S corporation. Casey is a 60% shareholder and Bryant is a 40% shareholder. On September 30, 2014, Bryant sold his CB shares to Don. CB reported business income for 2014 as follows (assume that there are 365 days in the year): $$\begin{array} { | l | r | } 
\hline { \text { Period } } & { \text { Income } } \
\hline \text { January } 1 \text { through September } 30 \text { (273 days) } & \$ 200,000 \
\hline \text { October } 1 \text { through December } 31 \text { (92 days } ) & 530,000 \
\hline \text { January } 1 \text { through December } 31 & \$ 730,000 \
\hline
\end{array}$$ How much 2014 income is allocated to each shareholder if CB uses its normal accounting rules to allocate income to the specific periods in which it was actually earned?

CB Corporation Was Formed as a Calendar-Year S Corporation How Much 2014 Income Is Allocated to Each Shareholder If