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Partnership Tax Return Final Federal Taxation Il Prepare UMPI Plumbing's 2018 tax return from the following information provided. Tax forms required for the final, be sure to include Form 1065 and Schedule K-1 (Form 1065). Helpful Hint: grading emphasis is placed on the most important parts of the form 1065; page 1 (1.a thru 22), page 4 (schedule K), page 5 (Analysis of Net Income (Loss), Schedule L, M-1, & M-2) and Schedule K-1 (form 1065). Use this as your guide to ensure you are completing all required parts of the final. You do not need to complete Form 4562 Depreciation & Amortization. Ignore all AMT calculations and AMT related reporting items. Information: Sammie and Paul decided to venture out on their own and form their own plumbing company called UMPI Plumbing, LLC. (UMP). They formed UMPI as a limited liability company (LLC). Sammie and Paul each own 50% of the company. UMPI has several employees. Information relating to UMPI and its owners: Name of Company: Address: Company formed and started: Accounting Method: Tax-year end: Employer Identification Number: UMPI Plumbing, LLC 181 Main Street Presque Isle, ME 04769 (has not changed since inception) January 1, 2011 Cash December 31 42-1234567 Members' Profit/Loss/Capital membership interest is 50%. See the following information for both partners: Sammie Rogers 123 Happy Street Presque Isle, ME 04769 SSN-006-33-4281 Paul Johnson 321 Plumbers Road Presque Isle, ME 04769 SSN: 008-22-4398 Profit/Loss/Capital membership interest is 50%. Other information: . 0 . . UMPI is a domestic limited liability company Sammie and Paul are not related. Sammie and Paul are both U.S. citizens. Both Sammie and Paul are managing members. UMPI has not and did not file a Form 8893 or anything similar to it this year or in the past. UMPI is not a publicly traded partnership. During the year, no debt was cancelled or forgiven in relation to UMPI. UMPI is not required to file a Form 8918. UMPI did not have or control a foreign bank account or have authority over any such financial account. UMPI was not the grantor of or a transferor to a foreign trust. UMPI has never made a Section 754 election. UMPI has never entered a like-kind exchange or distributed a tenancy-in-common or other undivided interest in partnership property. UMPI has never been required to file Form 8858. UMPI was required to file Form(s) 1099 related to certain payments it made during the year and those forms were filed on a timely basis. UMPI was not required to file any Form(s) 5471 during the year. Sammie is the Tax Matters Partner (TMP). Both Sammie and Paul are active in the business and work full-time for UMPI. The debt owed to First National Bank is a non-recourse obligation and neither Sammie nor Paul have guaranteed its repayment (see balance sheet below). This debt is not directly tied to any specific asset but is rather a debt secured against all of the assets of the company, with neither Sammie nor Paul personally responsible for its repayment. During the year, Sammie and Paul each contributed $20,000 to the capital of UMPI UMPI does not maintain any inventory. UMPI purchases supplies and has a policy of expensing such purchases as paid for tax and book purposes consistent with existing tax law. UMPI uses MACRS depreciation for both tax and book purposes. During the year, Sammie and Paul each received a $75,000 distribution from UMPI. The depreciation has been properly calculated for tax purposes. Ignore the requirement to prepare and attach form 4562 depreciation and amortization. . C . Financial Statements: Balance Sheet Assets: 12/31/17 12/31/18 Cash Tax-exempt Securities Building Less: Acc. Depreciation Equipment Less: Acc. Depreciation Land $ 30,000 100,000 4,000,000 (551,282) 2,500,000 (1,481,400) 1,000,000 $ 45,000 100,000 4,000,000 (653,842) 3,250,000 (2,231,663) 1,000,000 Total Assets: $5,597,318 $5,509,495 Liabilities and Capital: Note Payable-First National Bank Note Payable-Sammie Rogers Note Payable- Paul Johnson $4,267,318 300,000 200,000 $4,046,673 300,000 200,000 Capital Account-SR Capital Account-PJ 415,000 415,000 481,411 481,411 Total Liabilities and Capital: $5,597,318 $5,509,495 Income Statement for the year ending December 31, 2018 Item Amount Income: Service Revenue-Cash Service Revenue-Credit Cards Consulting Revenue-Cash Consulting Revenue-Credit Cards $ 243,565 $2,022,710 $ 75,950 $ 130,005 Interest Income-First National Bank Municipal Bond Interest Income $ $ 1,540 2,500 Total Income: $2,476,270 Expenses: Employee Salaries Guaranteed payment-SR Guaranteed payment-PJ Repairs and Maintenance-Trucks Rent Payroll Taxes Licensing Fees Property Taxes Interest Expense Depreciation Office Supplies Employee Training Advertising Plumbing supplies Meals Travel Gasoline Utilities Telephone $ 515,735 $ 50,000 $ 50,000 $ 113,415 $ 35,000 $ 41,260 $ 1,750 $ 77,000 $ 235,000 $ 852,823 $ 3,420 $ 5,675 $ 18,850 $ 15,125 $ 13,740 $ 4,210 $ 158,675 $ 24,940 $ 16,830 Total Expenses: $2,233,448 Net Income: $ 242,822 Partnership Tax Return Final Federal Taxation Il Prepare UMPI Plumbing's 2018 tax return from the following information provided. Tax forms required for the final, be sure to include Form 1065 and Schedule K-1 (Form 1065). Helpful Hint: grading emphasis is placed on the most important parts of the form 1065; page 1 (1.a thru 22), page 4 (schedule K), page 5 (Analysis of Net Income (Loss), Schedule L, M-1, & M-2) and Schedule K-1 (form 1065). Use this as your guide to ensure you are completing all required parts of the final. You do not need to complete Form 4562 Depreciation & Amortization. Ignore all AMT calculations and AMT related reporting items. Information: Sammie and Paul decided to venture out on their own and form their own plumbing company called UMPI Plumbing, LLC. (UMP). They formed UMPI as a limited liability company (LLC). Sammie and Paul each own 50% of the company. UMPI has several employees. Information relating to UMPI and its owners: Name of Company: Address: Company formed and started: Accounting Method: Tax-year end: Employer Identification Number: UMPI Plumbing, LLC 181 Main Street Presque Isle, ME 04769 (has not changed since inception) January 1, 2011 Cash December 31 42-1234567 Members' Profit/Loss/Capital membership interest is 50%. See the following information for both partners: Sammie Rogers 123 Happy Street Presque Isle, ME 04769 SSN-006-33-4281 Paul Johnson 321 Plumbers Road Presque Isle, ME 04769 SSN: 008-22-4398 Profit/Loss/Capital membership interest is 50%. Other information: . 0 . . UMPI is a domestic limited liability company Sammie and Paul are not related. Sammie and Paul are both U.S. citizens. Both Sammie and Paul are managing members. UMPI has not and did not file a Form 8893 or anything similar to it this year or in the past. UMPI is not a publicly traded partnership. During the year, no debt was cancelled or forgiven in relation to UMPI. UMPI is not required to file a Form 8918. UMPI did not have or control a foreign bank account or have authority over any such financial account. UMPI was not the grantor of or a transferor to a foreign trust. UMPI has never made a Section 754 election. UMPI has never entered a like-kind exchange or distributed a tenancy-in-common or other undivided interest in partnership property. UMPI has never been required to file Form 8858. UMPI was required to file Form(s) 1099 related to certain payments it made during the year and those forms were filed on a timely basis. UMPI was not required to file any Form(s) 5471 during the year. Sammie is the Tax Matters Partner (TMP). Both Sammie and Paul are active in the business and work full-time for UMPI. The debt owed to First National Bank is a non-recourse obligation and neither Sammie nor Paul have guaranteed its repayment (see balance sheet below). This debt is not directly tied to any specific asset but is rather a debt secured against all of the assets of the company, with neither Sammie nor Paul personally responsible for its repayment. During the year, Sammie and Paul each contributed $20,000 to the capital of UMPI UMPI does not maintain any inventory. UMPI purchases supplies and has a policy of expensing such purchases as paid for tax and book purposes consistent with existing tax law. UMPI uses MACRS depreciation for both tax and book purposes. During the year, Sammie and Paul each received a $75,000 distribution from UMPI. The depreciation has been properly calculated for tax purposes. Ignore the requirement to prepare and attach form 4562 depreciation and amortization. . C . Financial Statements: Balance Sheet Assets: 12/31/17 12/31/18 Cash Tax-exempt Securities Building Less: Acc. Depreciation Equipment Less: Acc. Depreciation Land $ 30,000 100,000 4,000,000 (551,282) 2,500,000 (1,481,400) 1,000,000 $ 45,000 100,000 4,000,000 (653,842) 3,250,000 (2,231,663) 1,000,000 Total Assets: $5,597,318 $5,509,495 Liabilities and Capital: Note Payable-First National Bank Note Payable-Sammie Rogers Note Payable- Paul Johnson $4,267,318 300,000 200,000 $4,046,673 300,000 200,000 Capital Account-SR Capital Account-PJ 415,000 415,000 481,411 481,411 Total Liabilities and Capital: $5,597,318 $5,509,495 Income Statement for the year ending December 31, 2018 Item Amount Income: Service Revenue-Cash Service Revenue-Credit Cards Consulting Revenue-Cash Consulting Revenue-Credit Cards $ 243,565 $2,022,710 $ 75,950 $ 130,005 Interest Income-First National Bank Municipal Bond Interest Income $ $ 1,540 2,500 Total Income: $2,476,270 Expenses: Employee Salaries Guaranteed payment-SR Guaranteed payment-PJ Repairs and Maintenance-Trucks Rent Payroll Taxes Licensing Fees Property Taxes Interest Expense Depreciation Office Supplies Employee Training Advertising Plumbing supplies Meals Travel Gasoline Utilities Telephone $ 515,735 $ 50,000 $ 50,000 $ 113,415 $ 35,000 $ 41,260 $ 1,750 $ 77,000 $ 235,000 $ 852,823 $ 3,420 $ 5,675 $ 18,850 $ 15,125 $ 13,740 $ 4,210 $ 158,675 $ 24,940 $ 16,830 Total Expenses: $2,233,448 Net Income: $ 242,822