Case 3, Shannon Properties—Additional Tax Return Information
1. Form 1120 Consolidated Corporate Income Tax Return
To complete the spread-sheet enter the relevant data for each corporation and add across
to obtain the totals. There are no adjustments required to complete this assignment.
GAAP consolidation procedures are both unnecessary and inappropriate.
2. Pro Series 2003—General Observations.
Save your processed input to the C drive of your computer. Wayland Caldwell,
our Calloway computer specialist, will assist you if you have problems. You can
reach Wayland at ex 7010.
You will find that accessing the Pro Series 2003 software may be slow. Once the
blue and white Pro Series title sheet appears, click on it and enter the program.
The first step in completing the corporate and partnership tax return assignments
is to establish a client file. There are separate detailed instructions at the end of
this me on saving and retrieving information. You must create a separate file for
the corporate and for the partnership returns. Start with the Federal form 1120
and then do the IA and MN state corporate returns.
Use select print (printer on tool bar with the red arrow) to print the return
Right click on Override to correct information previously entered automatically.
The Pro Series 2003 is very complex and you may not agree with the
predetermined result. Check to make sure that the result transfers correctly to
other schedules and/or worksheets.
A good illustration of the use of the override feature is the calculation of an
estimated income tax penalty on page 1 of Form 1120. Use override to enter a
–0- for this penalty.
3. Corporate Income Tax Information—Form 1120
Shannon Properties, Inc address is:
133 Intervale Road
Des Moines, IA 50318
ID # 56-1632073
Ardmore Properties, Inc. address is:
4106 Vermillion Highway
Sioux Falls, SD 57105
ID # 65-3094877
Page 1, line 13, Form 1120 Assume that all of the salaries and wages are
related to employees of Shannon and Ardmore.
Form 851 Ardmore’s PBA code # is 1120. Shannon owns 100% of the
common stock of Ardmore. Both corporations have only one class of stock.
Form 4562 Enter depreciation amounts as a total on line 17.
Form 4797 Enter the § 1231 Land transactions and the § 1231 loss in part II
of the form. Enter the § 1250 Building gain transactions in part V. Do not
complete any asset disposition forms. The programming is very difficult to
The Ardmore land is an investment property. Enter the sale of this land on
Schedule D not Form 4797.
Schedule L—The investment in Ardmore of $ 10,000 remains on Schedule L
at the end of the year. (The shareholders do not dissolve the corporation until
4. Corporate Tax Information—Iowa Form 1120
The county ID # is 14, the contact person is Maureen Norgard.
Shannon is filing a consolidated Iowa, consolidated Federal income tax return
Iowa non-business income relates to the sale of Iowa § 1231 & § 1250
You will receive a copy of the Iowa return completed by the client. Compare
it with your own input; do the client’s results seem appropriate?
5. Corporate Tax Information—Minnesota Form M-4, M4-I, M-4-A, M-4-T
Minnesota ID # is 4691066
Schedule M-4A, include in the calculations for column A, the cost basis of the
Ardmore land at the beginning of the year.
Schedule M-4I, sales of the land and fixed assets are non-apportionable.
Total nonapportionable income includes all Schedule D and Form 4797
6. Form 1065 Partnership Tax Information
The employer ID # is 58-1419307
Name and Capital Account Partner’s
Address ID # 1/01/03 Interest
Maureen Norgard 282-11-1404 $ 578,440 25 %
133 Intervale Rd.
Des Moines, IA
Kim Norgard 301-29-1705 $ 578,440 25 %
4797 Terrell Rd.
Cedar Rapids, IA
Greg Norgard 301-42-1995 $ 578,440 25 %
Sioux City, IA
Robert Norgard 282-67-1029 $ 578,441 25 %
133 Intervalle Rd.
Enter rental income and deductions on Form 8825, not page 1 of Form 1065.
Schedule D and Form 4797 use the same approach used in Form 1120 except
there is no § 291 gain.
Schedule B, all questions answered no; no tax matters partner.
7. Iowa Form 1065
Part III 2000--$ 12,407; 2001 $ 54,788 and 2002 $ 78,655.
The partnership phone number is 515-561-8709
8. Minnesota Form M-3 and related schedules:
Use the same apportionment schedule as Minnesota form M-4A.
Form M-3 worksheet; you should enter amounts on lines 2., 4d and 6
§ 1231 gains are non-business income.
The partners did not file form MW 4NR.