Taxation for Decision Makers, 2012 Edition

APPENDIX C

SAMPLE FILLED-IN TAX RETURNS

SAMPLE RETURN 1 (SR1)

INFORMATION FOR CORPORATE TAX RETURN

Facts

William Spicer (SS# 123-45-6789) owns 80 percent of the stock in Bill's Market, a cash-basis gourmet food market operating as a corporation. It is located at 387 Spring Street, Raleigh, NC 29288. William's wife, June (SS# 987-65-4321), owns the other 20 percent of the outstanding stock of the corporation but she is not active in the business. The Market's EIN is 79-7979797 and its business code is 445290. It was incorporated on July 15, 2001. During the last tax year, the Market had the following results from its operations:

The Market sold a unique piece of equipment for $13,000. It had originally cost $5,000 when purchased on March 5, 2008; it had an adjusted basis of $3,000 when sold on August 15, 2010. The Market also sold a display case for $1,000 on December 12, 2010, that had cost $12,000 when purchased on June 6, 2006; it had an adjusted basis of $4,000 when sold. The gains or losses on these asset sales are the same for tax and financial accounting.

Information specific to the corporate form: The corporation made estimated payments for its own taxes of $10,000 and withheld $45,000 from William's salary for income taxes. For financial accounting, the corporation does not expense the new display case but deducts $1,000 of depreciation expense. It has a beginning balance ...