Jeff, a 52% owner of an S corporation, has a stock basis of zero at the beginning of the year. Jeff's basis in a $10,000 loan made to the corporation and evidenced by a corporate note has been reduced to zero by pass-through losses. During the year, his net share of the corporate taxable income is $8,000 and there is no cash distribution. The corporation repays the $10,000 loan principal to Jeff. Discuss the tax effects of the distribution. Beginning Basis 0
Add Taxable Corporate Income 11,000
Basis for Distribution 11,000
Less Distributions ($11,000 or $15,000 whichever is less) 11,000
Ending Stock Basis 0
A non-dividend disruption in excess of the stock basis is to be treated and reported as capital gain on the person's personal return of the shareholder. So here there is a $11,000 of cash distributions will have no related tax effects. The remaining balance though if $4,000 (15,000-11,000) will have to be reported as capital gain and taxed accordingly.

crow design, inc. is a web site design and consulting firm. the firm uses a job order costing system in which each client is a different job. crow design assigns direct labor, licensing costs, and travel costs directly to each job. it allocates indirect costs to jobs based on a predetermined overhead allocation rate, computed as a percentage of direct labor costs. direct labor hours (professional) 6,250 hours direct labor costs ($1,800,000 support staff salaries ,000 computer ,000 office ,000 office ,000 in november 2012, crow design served several clients. records for two clients appear here: delicious treats mesilla chocolates direct labor 700 hours 100 hours software licensing $ 4,000 $400 travel costs 8,000 1. compute crow design’s direct labor rate and its predetermined indirect cost allocation rate for 2012. 2. compute the total cost of each job. 3. if simone wants to earn profits equal to 50% of service revenue, how much (what fee) should she charge each of these two clients? 4. why does crow design assign costs to jobs?