Assignment 3

Pass Through Assignment

To complete this assignment, read the information below and then complete the 2019 partnership tax return (form 1065) including the K-1s, 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.

This assignment has 35 questions and 35 points. All questions are weighted equally. This assignment may be completed individually, or with one other student. If completed in pairs, BOTH students must enter their answers in their own D2L account in order to receive credit. These questions must be answered on D2L by the deadline in order to receive credit. If you have extenuating circumstances, please let me know with ample time before the deadline so we can make alternate arrangements. Outside of extenuating circumstances, late assignments will not be accepted because solutions will be posted following the deadline.

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.
  • Dan owns 3%
  • Lisa owns 6%
• Additional Information about Dan (not including partnership info)
  • Married, 1 child
  • Wages from job = $20,000
  • Wages from wifes job = $30,000
• Additional Information about Lisa (not including partnership info)
  • Single, no children
  • Wages from job = 132,000
  • Sold stock held LT at a gain of 25,000
  • Paid state taxes of 9,000
  • 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:

Dans Schedule K-1, Part III

Line 1:

Line 8:

Line 18a:

Lisas K-1

Line 1:

Line 13a:

Line 13k:

Line 20b:

Dans 1040

Line 1:

Line 2b:

Line 7b:

Line 8b:

Line 9:

Line 10:

Line 11a:

Schedule 1, Line 5:

Lisas 1040

Line 7b:

Line 8b:

Line 9:

Line 10:

Line 11b:

Schedule 1, Line 5:

Other Questions

By how much does Dans AGI increase because of the partnership activities?

By how much does Lisas taxable income decrease because of the partnership activities?