John, Jack, Jill, and Julie form limited liability company

John, Jack, Jill, and Julie form limited liability company and elect to be S-Corporation. They contribute the following amounts:

John – 25,000

Jack – 10,000

Jill – 10,000

Julie – 5,000

The operating agreement says that all profits are to be distributed by law.

John will perform services for the company and get paid $100,000 a year for those services. The company will be able to deduct this amount from net income. In the first year of operations, the company had the following items of income:

Services – 160,000

Expenses – 24,000

Tax Depreciation – 28,000

Nobody withdraws any money from the S-Corp, except for Jack who withdraws $1,000.

Questions (using 2020 rates)

1. How much of John’s taxable income is subject to Self Employment Tax ?

2. What is Jill’s ending basis?

3. What is Julie’s profit percentage? (e.g. if 22%, say .22)