ACNT 1347

Form 1065 Practice Tax Return

Facts in 2019:

ABC LLP, a limited liability partnership, 123 Oak Dr Houston TX 77002

EIN-74-1111111

Date Business Started 1/1/2000

Business Activity: retail sales; Product: Family Clothing; Business code: 448140.

The partnership is a cash basis business

Total Assets $3,050,000

Gross Receipts $1,000,000

Cost of Goods Sold $400,000 (assume no beginning and ending inventory and

purchases are $400,000)

ABC LLP uses FIFO method for determining the cost of goods sold and the cash

method for all other income and expenses.

Guaranteed payment for services in the amount of $200,000 was paid to Bee

o

Hint: When using Tax Act, open up a Schedule K-1 for each partner.

Then, enter guaranteed payment on Bee Jones K-1. The amount will carry

over to the Form 1065, Schedule K.

Bee is also the Tax Matters partner.

Salaries and wages paid to employees was $50,000

Office Rent paid for home office was $10,000

Supplies expense totaled $40,000

Partner information is as follows:

Partner Capital Profit Loss Residency SSN Address

Bee Jones 40% 40% 40% TX 222-22-2222 124 Oak Dr, Hou. TX 77002

John Smith 40% 40% 40% TX 333-33-3333 125 Oak Dr, Hou. TX 77002

Julie Smart 20% 20% 20% TX 444-44-4444 126 Oak Dr Hou. TX 77002

All partners materially participate in the day-to-day partnership operations.

All partners use their tax basis as their capital account balances.

The partner's beginning Capital Balances at 1/1/2019 are as follows:

Partner Capital Balance

Bee Jones $1,100,000

John Smith $1,100,000

Julie Smart $ 550,000

pls, form 1065