Assignment 3

Pass Through Assignment

To assignment, read the information below and then complete the 2019 partnership tax return (form 1065) including the K-1's, and both individuals' 2019 1040 by hand. The tax forms themselves will not be turned in or graded, but you must complete them in order to answer the questions on D2L, which will be graded. Please refer to the flow through exercise we do to assist you in completing this assignment.

The questions that must be answered are shown below, but must be completed on D2L in order to receive credit.For fill in the blank questions, enter whole numbers only, with no commas, periods, or symbols.

Scenario

Craft Beer Brewing Partnership

Revenues 690,000

Office Rent 30,000

COGS 199,000

Salaries 240,000

ST Gain on Sale of Stock 100,000

LT Loss on Sale of Stock 500,000

Contributions to Charities 62,000

Friends Dan and Lisa are each partners in the beer brewing partnership above.

o Dan owns 3%

o Lisa owns 6%

Additional Information about Dan (not including partnership info)

o Married, 1 child

o Wages from job = $20,000

o Wages from wife's job = $30,000

Additional Information about Lisa (not including partnership info)

o Single, no children

o Wages from job = 132,000

o Sold stock held LT at a gain of 25,000

o Paid state taxes of 9,000

o Paid qualified mortgage interest of 10,000

Questions to complete on D2L

1065, page 1

Line 1:

Line 3:

Line 8:

Line 21:

Line 22:

1065, page 4 (Schedule K)

Line 1:

Line 8:

Line 13a:

Line 13b:

Line 16b:

Line 18a:

Line 20b:

Dan's Schedule K-1, Part III

Line 1:

Line 8:

Line 18a:

Lisa's K-1

Line 1:

Line 13a:

Line 13k:

Line 20b:

Dan's 1040

Line 1:

Line 2b:

Line 7b:

Line 8b:

Line 9:

Line 10:

Line 11a:

Schedule 1, Line 5:

Lisa's 1040

Line 7b:

Line 8b:

Line 9:

Line 10:

Line 11b:

Schedule 1, Line 5:

Other Questions

By how much does Dan's AGI increase because of the partnership activities?

By how much does Lisa's taxable income decrease because of the partnership activities?