1.) Enerico contributes $189,200 cash in exchange for a 40% interest in the calendar year ABC LLC. This year ABC generates $151,360 of ordinary taxable income and has no separately stated items. Enerico withdraws $18,920 cash from the partnership at the end of the tax year.

If an amount is zero, enter "0".

a.Compute Enerico's gross income from ABC's ordinary income for the tax year. $fill in the blank

b.Compute Enerico's gross income from the LLC's cash distribution. $fill in the blank

2.) At the beginning of the tax year, Barnaby's basis in the BBB Partnership was $138,600, including his $13,860 share of partnership debt. At the end of the tax year, his share of the entity's debt was $20,790. Barnaby's share of BBB's ordinary income for the year was $55,440, and he received cash distributions totaling $34,650. In addition, his share of the partnership's tax-exempt income was $2,772.

Determine Barnaby's basis at the end of the tax year. $fill in the blank

3.) Candlewood LLC began its business on December 1, 2022; and it uses a calendar tax and an accounting year. Candlewood incurred $11,900 in legal fees for drafting the LLC's operating agreement and $5,950 in accounting fees for tax advice of an organizational nature, for a total of $17,850 of organizational costs. Candlewood also incurred $26,000 of preopening advertising expenses and $27,800 of salaries and training costs for new employees before opening for business, for a total of $53,800 of startup costs. The LLC desires to take the largest deduction available for these costs.

If required, round any division to six decimal places and use in subsequent computations. Round your final answers to the nearest dollar.

Compute Candlewood's deductions for the first year of its operations for: a. Organizational expenditures: $ fill in the blank b. Startup expenses: $ fill in the blank

4.) Mira and Lemma are equal owners of a business entity. Each contributed $63,000 cash to the business. Then the entity acquired a $252,000. loan from a bank. This year operating profits totaled $75,600. Determine Lemma's basis in her interest at the end of the tax year assuming that the entity is a partnership, a C corporation, or a S corporation.

a. If the entity is a partnership, Mira and Lemma each have a basis of $fill in the blank at the end of the year.

b. If the entity is a C corporation, Mira and Lemma each have a basis of $fill in the blank at the end of the year.

c. If the entity is an S corporation, Mira and Lemma each have a basis of $fill in the blank at the end of the year.

5.) Carlota and Dave formed an S corporation; Carlota owns 75% of the out-standing shares, and Dave owns the rest. When the entity's AAA balance is $1,000,000, it distributes an asset to each shareholder; the basis of each asset to the corporation is $185,000. Carlota's asset is worth $259,000, and Dave's is worth $222,000.

a. How much gain, if any, does the the corporation recognize as a result of the distribution? $fill in the blank

b. By how much, if any, does the distribution increase Dave's gross income? $ fill in the blank

c. By how much, if any, does the distribution increase Carlota's gross income? $ fill in the blank

6. Sea Green Enterprises reports the following assets and liabilities on its balance sheet.

	Net Book Value	Fair Market Value
Assets	$810,000			$1,215,000
Liabilities	243,000			243,000

Sea Green just lost a product liability lawsuit, with damages of $12,150,000 being awarded to the plaintiff. Although Sea Green will appeal the judgment, legal counsel indicates the judgment is highly unlikely to be overturned by the appellate court. The product liability insurance carried by Sea Green has a policy ceiling of $7,290,000.

Assume any net assets of the company will be used to reduce the judgment.

What is the amount of liability of Sea Green Enterprises and its owners if the business entity is a sole proprietorship, a partnership, a C corporation, and an S corporation?

If an amount is zero, enter "0".

a. If the form of the business entity is a sole proprietorship, the owner is ultimately liable for

$ fill in the blank

b. If the form of the business entity is a partnership, the partnership and the general partners are ultimately liable for

$fill in the blank

c. If the form of the business entity is an LLC, legal liability for its debts

are not limited OR is limited to its assets ?

. Therefore, the members of the LLC

have OR no have

personal liability for the $ fill in the blank

d. If the form of the business entity is a C corporation, the C corporation has limited liability of

$0 OR $810,000 OR $1,215,000 OR $4,860,000

. The plaintiff

can sue the shareholders for any unpaid liability OR will share with the other creditors with respect to claims against the assets

. The shareholders of the C corporation

are liable OR have no personal liability

for the remaining corporate debts.

e. If the form of the business entity is an S corporation, the S corporation and its shareholders are treated like

a partnership in part (b) OR a C corporation in part (c)