Aaron, Deanne, and Keon formed the Blue Bell General Partnership at the beginning of the current year. Aaron and Deanne each contributed $110,000 and Keon transferred an acre of undeveloped land to the partnership. The land had a tax basis of $70,000 and was appraised at $180,000. The land was also encumbered with a $70,000 nonrecourse mortgage for which no one was personally liable. All three partners agreed to split profits and losses equally. At the end of the first year Blue Bell made a $7,000 principal payment on the mortgage. For the first year of operations, the partnership records disclosed the following information

Partnership Tax Preparation Problem Aaron, Deanne and Keon formed the Blue Bell General Partnership at the beginning of the current year. Aaron and Deanne each contributed $110,000 and Keon transferred an acre of undeveloped land to the partnership. The land had a tax basis of $70,000 and was appraised at $180,000. All three partners agreed to split profits and losses equally. For the first year of operations, the partnership records disclosed the following information: Sales Revenue $470,000 Cost of Goods Sold 410,000 Operating Expenses 70,000 Long-term capital gains 2,400 1231 gains 900 Charitable contributions 300 Municipal bond interest 250 Salary paid as a guaranteed payment to Deanne (not included in expenses) 3,000 Prepare form 1065 for Blue Bell, along with Schedule K to be included with its Form 1065, and Schedule K-1 for Deanne