LeBron, Dennis, and Susan formed the Bar T LLC at the beginning of the current year. LeBron
Question:
For the first year of operations, the partnership records disclosed the following information:
Sales revenue............................................................................... $620,000
Cost of goods sold....................................................................$380,000
Operating expenses....................................................................$670,000
Dividends.................................................................................$1,200
Municipal bond interest...................................................................$300
Salary paid as a guaranteed payment to Susan (not included in expenses) ...$10,000
Cash distributions split equally among the members at year-end................$3,000
a. Compute the adjusted basis of each member's interest immediately after the formation of the LLC.
b. When does each member's holding period for his or her LLC interests begin?
c. What is Bar T's tax basis and holding period in its land?
d. What is Bar T's required tax year-end?
e. What overall methods of accounting were initially available to Bar T?
f. List the separate items of partnership income, gains, losses, deductions and other items that will be included in each member's Schedule K-1 for the first year of operations. Use the proposed self-employment tax regulations to determine each member's self-employment income or loss.
g. What are the members' adjusted bases in their LLC interests at the end of the first year of operations?
h. What are the members' at-risk amounts in their LLC interests at the end of the first year of operations?
i. How much loss from Bar T, if any, will the members be able to deduct on their individual returns from the first year of operations?
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Related Book For
Taxation Of Individuals And Business Entities 2015
ISBN: 9780077862367
6th Edition
Authors: Brian Spilker, Benjamin Ayers, John Robinson, Edmund Outslay, Ronald Worsham, John Barrick, Connie Weaver
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