Assistance needed on filling out forms 1065 and K-1 for partnership as well as details on how to arrive at depreciation calculation and how to calculate outside and inside basis for the partners. I've attatched assignment detail and current progress.

1065 Form Department of the Treasury Internal Revenue Service A Principal business activity U.S. Return of Partnership Income For calendar year 2016, or tax year beginning OMB No. 1545-0123 , 2016, ending , 20 2016 . Information about Form 1065 and its separate instructions is at www.irs.gov/form1065. D Employer identification number Name of partnership Deliveries R US LLC Tax Prep B Principal product or service C Business code number Type or Print 12-34567 E Date business started Number, street, and room or suite no. If a P.O. box, see the instructions. 30 North Wendall Way 1/01/2015 City or town, state or province, country, and ZIP or foreign postal code F Total assets (see the instructions) Miami, Fl 33126 G H I J $ (1) Initial return (2) Final return (3) Name change (4) Address change (5) Technical termination - also check (1) or (2) (6) Other (specify) Check accounting method: (1) Cash (2) Accrual (3) Number of Schedules K-1. Attach one for each person who was a partner at any time during the tax year Check applicable boxes: Check if Schedules C and M-3 are attached . . . . . . . . . . . . . . . . . . . . . . . Amended return . . . . . Deductions (see the instructions for limitations) Income Caution. Include only trade or business income and expenses on lines 1a through 22 below. See the instructions for more information. 1a b c 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16a b 17 18 19 20 21 22 Signature of general partner or limited liability company member manager Print/Type preparer's name Firm's name Preparer's signature Paid Preparer Use Only 1c 2 3 4 5 6 7 8 9 10 11 12 13 14 15 4,135,792 2,396,812 1,738,980 5,200 239,231 125,000 8,500 11,935 127,862 92,326 5,255 16c 17 18 19 20 21 22 207,056 Under penalties of perjury, I declare that I have examined this return, including accompanying schedules and statements, and to the best of my knowledge and belief, it is true, correct, and complete. Declaration of preparer (other than general partner or limited liability company member manager) is based on all information of which preparer has any knowledge. Sign Here 1a Gross receipts or sales . . . . . . . . . . . . . $4,135,792 Returns and allowances . . . . . . . . . . . . 1b Balance. Subtract line 1b from line 1a . . . . . . . . . . . . . . . . . . Cost of goods sold (attach Form 1125-A) . . . . . . . . . . . . . . . . Gross profit. Subtract line 2 from line 1c . . . . . . . . . . . . . . . . . Ordinary income (loss) from other partnerships, estates, and trusts (attach statement) . . Net farm profit (loss) (attach Schedule F (Form 1040)) . . . . . . . . . . . . Net gain (loss) from Form 4797, Part II, line 17 (attach Form 4797) . . . . . . . . Other income (loss) (attach statement) . . . . . . . . . . . . . . . . . Total income (loss). Combine lines 3 through 7 . . . . . . . . . . . . . . Salaries and wages (other than to partners) (less employment credits) . . . . . . . Guaranteed payments to partners . . . . . . . . . . . . . . . . . . . Repairs and maintenance . . . . . . . . . . . . . . . . . . . . . . Bad debts . . . . . . . . . . . . . . . . . . . . . . . . . . . Rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Taxes and licenses . . . . . . . . . . . . . . . . . . . . . . . . Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . Depreciation (if required, attach Form 4562) . . . . . . 16a Less depreciation reported on Form 1125-A and elsewhere on return 16b Depletion (Do not deduct oil and gas depletion.) . . . . . . . . . . . . . Retirement plans, etc. . . . . . . . . . . . . . . . . . . . . . . . Employee benefit programs . . . . . . . . . . . . . . . . . . . . . Other deductions (attach statement) . . . . . . . . . . . . . . . . . . Total deductions. Add the amounts shown in the far right column for lines 9 through 20 . Ordinary business income (loss). Subtract line 21 from line 8 . . . . . . . . . May the IRS discuss this return with the preparer shown below (see instructions)? Yes No Date Date PTIN Firm's EIN Firm's address For Paperwork Reduction Act Notice, see separate instructions. Check if self-employed Phone no. Cat. No. 11390Z Form 1065 (2016) Form 1065 (2016) Schedule B 1 a c e 2 3 a Page What type of entity is filing this return? Check the applicable box: Domestic general partnership b Domestic limited partnership Domestic limited liability company d Domestic limited liability partnership Foreign partnership f Other At any time during the tax year, was any partner in the partnership a disregarded entity, a partnership (including an entity treated as a partnership), a trust, an S corporation, an estate (other than an estate of a deceased partner), or a nominee or similar person? . . . . . . . . . . . . . . . . . . . . . . . . . . . a Yes At the end of the tax year, did the partnership: Own directly 20% or more, or own, directly or indirectly, 50% or more of the total voting power of all classes of stock entitled to vote of any foreign or domestic corporation? For rules of constructive ownership, see instructions. If \"Yes,\" complete (i) through (iv) below . . . . . . . . . . . . . . . . . . . . . (i) Name of Corporation (ii) Employer Identification Number (if any) (iii) Country of Incorporation No At the end of the tax year: Did any foreign or domestic corporation, partnership (including any entity treated as a partnership), trust, or taxexempt organization, or any foreign government own, directly or indirectly, an interest of 50% or more in the profit, loss, or capital of the partnership? For rules of constructive ownership, see instructions. If \"Yes,\" attach Schedule B-1, Information on Partners Owning 50% or More of the Partnership . . . . . . . . . . . . . . . b Did any individual or estate own, directly or indirectly, an interest of 50% or more in the profit, loss, or capital of the partnership? For rules of constructive ownership, see instructions. If \"Yes,\" attach Schedule B-1, Information on Partners Owning 50% or More of the Partnership . . . . . . . . . . . . . . . . . . . . 4 2 Other Information (iv) Percentage Owned in Voting Stock b Own directly an interest of 20% or more, or own, directly or indirectly, an interest of 50% or more in the profit, loss, or capital in any foreign or domestic partnership (including an entity treated as a partnership) or in the beneficial interest of a trust? For rules of constructive ownership, see instructions. If \"Yes,\" complete (i) through (v) below . . (i) Name of Entity (ii) Employer Identification Number (if any) (iii) Type of Entity (iv) Country of Organization (v) Maximum Percentage Owned in Profit, Loss, or Capital Yes 5 Did the partnership file Form 8893, Election of Partnership Level Tax Treatment, or an election statement under section 6231(a)(1)(B)(ii) for partnership-level tax treatment, that is in effect for this tax year? See Form 8893 for more details . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . No 6 Does the partnership satisfy all four of the following conditions? a The partnership's total receipts for the tax year were less than $250,000. b The partnership's total assets at the end of the tax year were less than $1 million. c Schedules K-1 are filed with the return and furnished to the partners on or before the due date (including extensions) for the partnership return. d The partnership is not filing and is not required to file Schedule M-3 . . . . . . . . . . . . . . . If \"Yes,\" the partnership is not required to complete Schedules L, M-1, and M-2; Item F on page 1 of Form 1065; or Item L on Schedule K-1. 7 Is this partnership a publicly traded partnership as defined in section 469(k)(2)? . . . . . . . . . . . . During the tax year, did the partnership have any debt that was cancelled, was forgiven, or had the terms 8 modified so as to reduce the principal amount of the debt? . . . . . . . . . . . . . . . . . . Has this partnership filed, or is it required to file, Form 8918, Material Advisor Disclosure Statement, to provide 9 information on any reportable transaction? . . . . . . . . . . . . . . . . . . . . . . . . 10 At any time during calendar year 2016, did the partnership have an interest in or a signature or other authority over a financial account in a foreign country (such as a bank account, securities account, or other financial account)? See the instructions for exceptions and filing requirements for FinCEN Form 114, Report of Foreign Bank and Financial Accounts (FBAR). If \"Yes,\" enter the name of the foreign country. Form 1065 (2016) Form 1065 (2016) Schedule B Page Yes 11 At any time during the tax year, did the partnership receive a distribution from, or was it the grantor of, or transferor to, a foreign trust? If \"Yes,\" the partnership may have to file Form 3520, Annual Return To Report Transactions With Foreign Trusts and Receipt of Certain Foreign Gifts. See instructions . . . . . . . . . Is the partnership making, or had it previously made (and not revoked), a section 754 election? . . . . . . See instructions for details regarding a section 754 election. b Did the partnership make for this tax year an optional basis adjustment under section 743(b) or 734(b)? If \"Yes,\" attach a statement showing the computation and allocation of the basis adjustment. See instructions . . . . 13 14 15 16 17 Is the partnership required to adjust the basis of partnership assets under section 743(b) or 734(b) because of a substantial built-in loss (as defined under section 743(d)) or substantial basis reduction (as defined under section 734(d))? If \"Yes,\" attach a statement showing the computation and allocation of the basis adjustment. See instructions Check this box if, during the current or prior tax year, the partnership distributed any property received in a like-kind exchange or contributed such property to another entity (other than disregarded entities wholly owned by the partnership throughout the tax year) . . . . . . . . . . . . . . . . . . . At any time during the tax year, did the partnership distribute to any partner a tenancy-in-common or other undivided interest in partnership property? . . . . . . . . . . . . . . . . . . . . . . . . If the partnership is required to file Form 8858, Information Return of U.S. Persons With Respect To Foreign Disregarded Entities, enter the number of Forms 8858 attached. See instructions Does the partnership have any foreign partners? If \"Yes,\" enter the number of Forms 8805, Foreign Partner's Information Statement of Section 1446 Withholding Tax, filed for this partnership. Enter the number of Forms 8865, Return of U.S. Persons With Respect to Certain Foreign Partnerships, attached to this return. 18a Did you make any payments in 2016 that would require you to file Form(s) 1099? See instructions . . . . . b If \"Yes,\" did you or will you file required Form(s) 1099? . . . . . . . . . . . . . . . . . . . . Enter the number of Form(s) 5471, Information Return of U.S. Persons With Respect To Certain Foreign 19 Corporations, attached to this return. 20 21 22 No 12a c 3 Other Information (continued) Enter the number of partners that are foreign governments under section 892. During the partnership's tax year, did the partnership make any payments that would require it to file Form 1042 and 1042-S under chapter 3 (sections 1441 through 1464) or chapter 4 (sections 1471 through 1474)? . . . . Was the partnership a specified domestic entity required to file Form 8938 for the tax year (See the Instructions for Form 8938)? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Designation of Tax Matters Partner (see instructions) Enter below the general partner or member-manager designated as the tax matters partner (TMP) for the tax year of this return: Phone number of TMP Address of designated TMP If the TMP is an entity, name of TMP representative Identifying number of TMP Name of designated TMP Form 1065 (2016) Form 1065 (2016) Schedule K 1 2 3a Income (Loss) b c 4 5 6 7 8 9a Alternative Other Information Minimum Tax (AMT) Items Foreign Transactions Credits SelfEmploy- Deductions ment b c 10 11 12 13a b c d 14a b c 15a b c d e f 16a b c d g i l m n 17a b c d e f 18a b c 19a b 20a b c Page Partners' Distributive Share Items Ordinary business income (loss) (page 1, line 22) . . . . . . . . . . . . . 1 Net rental real estate income (loss) (attach Form 8825) . . . . . . . . . . . 2 Other gross rental income (loss) . . . . . . . . 3a Expenses from other rental activities (attach statement) 3b Other net rental income (loss). Subtract line 3b from line 3a . . . . . . . . . 3c Guaranteed payments . . . . . . . . . . . . . . . . . . . . . 4 Interest income . . . . . . . . . . . . . . . . . . . . . . . . 5 Dividends: 6a a Ordinary dividends . . . . . . . . . . . . . . . . . . . . . . . 6b b Qualified dividends Royalties . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Net short-term capital gain (loss) (attach Schedule D (Form 1065)) . . . . . . . 8 Net long-term capital gain (loss) (attach Schedule D (Form 1065)) . . . . . . . 9a Collectibles (28%) gain (loss) . . . . . . . . . 9b Unrecaptured section 1250 gain (attach statement) . . 9c Net section 1231 gain (loss) (attach Form 4797) . . . . . . . . . . . . . 10 Other income (loss) (see instructions) Type 11 Section 179 deduction (attach Form 4562) . . . . . . . . . . . . . . . 12 Contributions . . . . . . . . . . . . . . . . . . . . . . . . 13a Investment interest expense . . . . . . . . . . . . . . . . . . . 13b (1) Type Section 59(e)(2) expenditures: (2) Amount 13c(2) Other deductions (see instructions) Type 13d Net earnings (loss) from self-employment . . . . . . . . . . . . . . . 14a Gross farming or fishing income . . . . . . . . . . . . . . . . . . 14b Gross nonfarm income . . . . . . . . . . . . . . . . . . . . . 14c Low-income housing credit (section 42(j)(5)) . . . . . . . . . . . . . . 15a Low-income housing credit (other) . . . . . . . . . . . . . . . . . 15b Qualified rehabilitation expenditures (rental real estate) (attach Form 3468, if applicable) 15c Type 15d Other rental real estate credits (see instructions) Type Other rental credits (see instructions) 15e Other credits (see instructions) Type 15f Name of country or U.S. possession Gross income from all sources . . . . . . . . . . . . . . . . . . . 16b Gross income sourced at partner level . . . . . . . . . . . . . . . . 16c Foreign gross income sourced at partnership level e General category f Other 16f Passive category Deductions allocated and apportioned at partner level h Other . . . . . . . . . . 16h Interest expense Deductions allocated and apportioned at partnership level to foreign source income k Other 16k Passive category j General category Total foreign taxes (check one): Paid Accrued . . . . . . . . 16l Reduction in taxes available for credit (attach statement) . . . . . . . . . . 16m Other foreign tax information (attach statement) . . . . . . . . . . . . . Post-1986 depreciation adjustment . . . . . . . . . . . . . . . . . 17a Adjusted gain or loss . . . . . . . . . . . . . . . . . . . . . . 17b Depletion (other than oil and gas) . . . . . . . . . . . . . . . . . . 17c Oil, gas, and geothermal propertiesgross income . . . . . . . . . . . . 17d Oil, gas, and geothermal propertiesdeductions . . . . . . . . . . . . . 17e Other AMT items (attach statement) . . . . . . . . . . . . . . . . . 17f Tax-exempt interest income . . . . . . . . . . . . . . . . . . . . 18a Other tax-exempt income . . . . . . . . . . . . . . . . . . . . 18b Nondeductible expenses . . . . . . . . . . . . . . . . . . . . . 18c Distributions of cash and marketable securities . . . . . . . . . . . . . 19a Distributions of other property . . . . . . . . . . . . . . . . . . . 19b Investment income . . . . . . . . . . . . . . . . . . . . . . . 20a Investment expenses . . . . . . . . . . . . . . . . . . . . . . 20b Other items and amounts (attach statement) . . . . . . . . . . . . . . 4 Total amount 125,000 7700 3700 16878 Form 1065 (2016) Form 1065 (2016) Page 5 Analysis of Net Income (Loss) Net income (loss). Combine Schedule K, lines 1 through 11. From the result, subtract the sum of Schedule K, lines 12 through 13d, and 16l . . . . . . . . . . . . . . . . . . 1 Analysis by (ii) Individual (iii) Individual (v) Exempt (i) Corporate (iv) Partnership (active) (passive) Organization partner type: 1 2 (vi) Nominee/Other a General partners b Limited partners Schedule L 1 2a b 3 4 5 6 7a b 8 9a b 10a b 11 12a b 13 14 15 16 17 18 19a b 20 21 22 Assets Cash . . . . . . . . . . . . . Trade notes and accounts receivable . . . Less allowance for bad debts . . . . . Inventories . . . . . . . . . . . U.S. government obligations . . . . . Tax-exempt securities . . . . . . . Other current assets (attach statement) . . Loans to partners (or persons related to partners) Mortgage and real estate loans . . . . Other investments (attach statement) . . . Buildings and other depreciable assets . . Less accumulated depreciation . . . . Depletable assets . . . . . . . . . Less accumulated depletion . . . . . Land (net of any amortization) . . . . . Intangible assets (amortizable only) . . . Less accumulated amortization . . . . Other assets (attach statement) . . . . Total assets . . . . . . . . . . . Liabilities and Capital Accounts payable . . . . . . . . . Other current liabilities (attach statement) All nonrecourse loans . . . . . . . Other liabilities (attach statement) . Partners' capital accounts . . . Total liabilities and capital . . . . . . (d) . . . . . . . . Reconciliation of Income (Loss) per Books With Income (Loss) per Return Note. The partnership may be required to file Schedule M-3 (see instructions). Net income (loss) per books . . . . Income recorded on books this year not included 6 Income included on Schedule K, lines 1, 2, 3c, 5, 6a, 7, 8, 9a, 10, and 11, not recorded on books this year (itemize): 3 Guaranteed payments (other than health insurance) . . . . . . . 4 Expenses recorded on books this year not included on Schedule K, lines 1 through 13d, and 16l (itemize): a Depreciation $ b Travel and entertainment $ 5 Add lines 1 through 4 . . . Schedule M-2 3 4 5 End of tax year (c) Loans from partners (or persons related to partners) Mortgages, notes, bonds payable in 1 year or more 2 1 2 Beginning of tax year (a) (b) Mortgages, notes, bonds payable in less than 1 year Schedule M-1 1 Balance Sheets per Books . . on Schedule K, lines 1 through 11 (itemize): a Tax-exempt interest $ a Deductions included on Schedule K, lines 1 through 13d, and 16l, not charged against book income this year (itemize): Depreciation $ 7 8 9 Add lines 6 and 7 . . . . . . . . Income (loss) (Analysis of Net Income (Loss), line 1). Subtract line 8 from line 5 . 6 Distributions: a Cash . . b Property . Other decreases (itemize): . . . . . . . . Add lines 6 and 7 . . . . . . Analysis of Partners' Capital Accounts Balance at beginning of year . Capital contributed: a Cash . b Property Net income (loss) per books . . Other increases (itemize): Add lines 1 through 4 . . . . . . . . . . . . . . 7 8 9 . . . Balance at end of year. Subtract line 8 from line 5 Form 1065 (2016) Form 4562 Depreciation and Amortization Attach Information to your tax return. about Form 4562 and its separate instructions is at www.irs.gov/form4562. Name(s) shown on return 1 2 3 4 5 Attachment Sequence No. 179 Identifying number Business or activity to which this form relates Election To Expense Certain Property Under Section 179 Note: If you have any listed property, complete Part V before you complete Part I. Maximum amount (see instructions) . . . . . . . . . . . . . . . . . . Total cost of section 179 property placed in service (see instructions) . . . . . . Threshold cost of section 179 property before reduction in limitation (see instructions) . Reduction in limitation. Subtract line 3 from line 2. If zero or less, enter -0- . . . . . Dollar limitation for tax year. Subtract line 4 from line 1. If zero or less, enter -0-. If separately, see instructions . . . . . . . . . . . . . . . . . . . . 6 2016 (Including Information on Listed Property) Department of the Treasury Internal Revenue Service (99) Part I OMB No. 1545-0172 (a) Description of property (b) Cost (business use only) . . . . . . . . . . . . married . . . . . . . . . . . filing . . 1 2 3 4 5 (c) Elected cost 7 Listed property. Enter the amount from line 29 . . . . . . . . . 7 8 Total elected cost of section 179 property. Add amounts in column (c), lines 6 and 7 . . . . . . 8 9 Tentative deduction. Enter the smaller of line 5 or line 8 . . . . . . . . . . . . . . . . 9 10 Carryover of disallowed deduction from line 13 of your 2015 Form 4562 . . . . . . . . . . . 10 11 Business income limitation. Enter the smaller of business income (not less than zero) or line 5 (see instructions) 11 12 Section 179 expense deduction. Add lines 9 and 10, but don't enter more than line 11 . . . . . . 12 13 13 Carryover of disallowed deduction to 2017. Add lines 9 and 10, less line 12 Note: Don't use Part II or Part III below for listed property. Instead, use Part V. Part II Special Depreciation Allowance and Other Depreciation (Don't include listed property.) (See instructions.) 14 Special depreciation allowance for qualified property (other than listed property) placed in service during the tax year (see instructions) . . . . . . . . . . . . . . . . . . . . . . 14 15 Property subject to section 168(f)(1) election . . . . . . . . . . . . . . . . . . . . 15 16 Other depreciation (including ACRS) . . . . . . . . . . . . . . . . . . . . . . 16 Part III MACRS Depreciation (Don't include listed property.) (See instructions.) Section A 17 17 MACRS deductions for assets placed in service in tax years beginning before 2016 . . . . . . . 18 If you are electing to group any assets placed in service during the tax year into one or more general asset accounts, check here . . . . . . . . . . . . . . . . . . . . . . Section BAssets Placed in Service During 2016 Tax Year Using the General Depreciation System (a) Classification of property (b) Month and year placed in service (c) Basis for depreciation (business/investment use onlysee instructions) 19a b c d e f g h 3-year property 5-year property 7-year property 10-year property 15-year property 20-year property 25-year property Residential rental property i Nonresidential real property (d) Recovery period 25 yrs. 27.5 yrs. 27.5 yrs. 39 yrs. (e) Convention (f) Method MM MM MM MM S/L S/L S/L S/L S/L (g) Depreciation deduction Section CAssets Placed in Service During 2016 Tax Year Using the Alternative Depreciation System S/L 20a Class life 12 yrs. S/L b 12-year 40 yrs. MM S/L c 40-year Part IV Summary (See instructions.) 21 Listed property. Enter amount from line 28 . . . . . . . . . . . . . . . . . . . . 22 Total. Add amounts from line 12, lines 14 through 17, lines 19 and 20 in column (g), and line 21. Enter here and on the appropriate lines of your return. Partnerships and S corporationssee instructions . 23 For assets shown above and placed in service during the current year, enter the portion of the basis attributable to section 263A costs . . . . . . . 23 For Paperwork Reduction Act Notice, see separate instructions. Cat. No. 12906N 21 22 Form 4562 (2016) Page 2 Listed Property (Include automobiles, certain other vehicles, certain aircraft, certain computers, and property used for entertainment, recreation, or amusement.) Form 4562 (2016) Part V Note: For any vehicle for which you are using the standard mileage rate or deducting lease expense, complete only 24a, 24b, columns (a) through (c) of Section A, all of Section B, and Section C if applicable. Section ADepreciation and Other Information (Caution: See the instructions for limits for passenger automobiles.) 24a Do you have evidence to support the business/investment use claimed? 24b If \"Yes,\" is the evidence written? Yes No Yes (c) (a) (b) Business/ (d) Type of property (list Date placed investment use Cost or other basis vehicles first) in service percentage (e) Basis for depreciation (business/investment use only) (f) Recovery period (g) Method/ Convention (h) Depreciation deduction No (i) Elected section 179 cost 25 Special depreciation allowance for qualified listed property placed in service during the tax year and used more than 50% in a qualified business use (see instructions) . 25 26 Property used more than 50% in a qualified business use: % % % 27 Property used 50% or less in a qualified business use: S/L - % S/L - % S/L - % 28 Add amounts in column (h), lines 25 through 27. Enter here and on line 21, page 1 . 28 29 Add amounts in column (i), line 26. Enter here and on line 7, page 1 . . . . . . . . . . . . 29 Section BInformation on Use of Vehicles Complete this section for vehicles used by a sole proprietor, partner, or other \"more than 5% owner,\" or related person. If you provided vehicles to your employees, first answer the questions in Section C to see if you meet an exception to completing this section for those vehicles. (a) Vehicle 1 30 Total business/investment miles driven during the year (don't include commuting miles) . 31 Total commuting miles driven during the year 32 Total other personal (noncommuting) miles driven . . . . . . . . . 33 Total miles driven during the year. Add lines 30 through 32 . . . . . . . 34 Was the vehicle available for personal use during off-duty hours? . . . . . 35 Was the vehicle used primarily by a more than 5% owner or related person? . . Yes No (b) Vehicle 2 Yes No (c) Vehicle 3 Yes (d) Vehicle 4 No Yes No (e) Vehicle 5 Yes (f) Vehicle 6 No Yes No 36 Is another vehicle available for personal use? Section CQuestions for Employers Who Provide Vehicles for Use by Their Employees Answer these questions to determine if you meet an exception to completing Section B for vehicles used by employees who aren't more than 5% owners or related persons (see instructions). No 37 Do you maintain a written policy statement that prohibits all personal use of vehicles, including commuting, by Yes your employees? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 Do you maintain a written policy statement that prohibits personal use of vehicles, except commuting, by your employees? See the instructions for vehicles used by corporate officers, directors, or 1% or more owners . . 39 Do you treat all use of vehicles by employees as personal use? . . . . . . . . . . . . . . . . 40 Do you provide more than five vehicles to your employees, obtain information from your employees about the use of the vehicles, and retain the information received? . . . . . . . . . . . . . . . . . . . 41 Do you meet the requirements concerning qualified automobile demonstration use? (See instructions.) . Note: If your answer to 37, 38, 39, 40, or 41 is \"Yes,\" don't complete Section B for the covered vehicles. . . Part VI Amortization (a) Description of costs (b) Date amortization begins (c) Amortizable amount (e) Amortization period or percentage (d) Code section (f) Amortization for this year 42 Amortization of costs that begins during your 2016 tax year (see instructions): 43 Amortization of costs that began before your 2016 tax year . . . . . . 44 Total. Add amounts in column (f). See the instructions for where to report . . . . . . . . . . . . . . . 43 44 Form 4562 (2016) DRU INCOME STATEMENT FOR THE YEAR ENDING 12/31/2016 Item Amount DRU PARTNERSHIP 12/31/2016 Income Statement Gross Sales Less: Returns Net Sales Cost of Goods Sold Gross Profit Interest Income-Bank Interest Income-U.S. Gov't Municipal Bond Interest Income Total Income: Expenses: Advertising Amortization expense Automobile expense Dues and Subscriptions Insurance - Other Meals and Entertainment Merchant Fees Office Supplies and expense Professional Fees Telphone Expense Travel Bad Debts Charitable Contribution Depreciation Employee Salaries Federal Income Taxes (built-in gains tax) Fines and Penalties Guaranteed Payments Interest Expense $ 4,135,792 4,135,792 (2,396,812) 1,738,980 5,200 3,700 1,747,880 64,853 1,333 11,174 22,230 24,175 9,155 13,101 25,574 16,337 3,368 19,625 11,935 7,700 229,121 239,231 12,300 125,000 708 Licensing Fees Mortgage Interest Payroll Taxes Rent Repairs and Maintenance State Income Taxes (built-in gain tax) Telephone Utilities Total Expenses: Book Income (loss): 706 5,255 91,620 127,862 8,500 1,070,863 $ 677,017 DRU 2016 Balance Sheet Assets: Cash Inventory Fixed Assets Less: Acc. Depreciation Acc. Deprec prior year PP Tax Exempt securities Land-Unimproved Intangible Assets Accumulated Amortization Security Deposits Total Assets: Liabilities and Shareholders' Equity: Note Payable-5th 3rd Bank(Credit Line) Due to Billy Bob Wanker 12/31/2015 93,057.00 196,867.00 63,208.00 (63,208.00) 187,753.00 559,819.00 738,208.00 (332,879.00) 20,000.00 (1,333.00) 23,608.00 50,000.00 75,000.00 20,000.00 (2,666.00) 78,443.00 332,199.00 1,373,678.00 145,300.00 43,000.00 191,931.00 Mortgage Real Estate Owned Municipal Bond Margin Account Partners Capital Total Liabilities and Shareholders' Equity 12/31/2016 124,569.71 50,000.00 143,899.00 1,001,177.00 332,199.00 1,367,677.71 651113 Final K-1 2016 Schedule K-1 (Form 1065) Department of the Treasury Internal Revenue Service Part III Partner's Share of Current Year Income, Deductions, Credits, and Other Items For calendar year 2016, or tax year beginning ending A B 1 Ordinary business income (loss) 2 Net rental real estate income (loss) 3 Other net rental income (loss) 4 Guaranteed payments 5 Interest income 6a Ordinary dividends 6b Qualified dividends 15 Credits 16 Foreign transactions 17 Alternative minimum tax (AMT) items 18 Tax-exempt income and nondeductible expenses 19 Distributions 20 Other information , 2016 , 20 Partner's Share of Income, Deductions, See back of form and separate instructions. Credits, etc. Part I OMB No. 1545-0123 Amended K-1 Information About the Partnership Partnership's employer identification number Partnership's name, address, city, state, and ZIP code Frank Mogato D IRS Center where partnership filed return Check if this is a publicly traded partnership (PTP) Part II E F Information About the Partner Limited partner or other LLC member H Domestic partner Foreign partner I1 What type of entity is this partner? I2 If this partner is a retirement plan (IRA/SEP/Keogh/etc.), check here . . . . . . . . . . . . . . . . . . 25 25 25 Loss Capital Net short-term capital gain (loss) 9a Net long-term capital gain (loss) 9b Collectibles (28%) gain (loss) 9c Unrecaptured section 1250 gain 10 Net section 1231 gain (loss) 11 Other income (loss) 12 Section 179 deduction 13 Other deductions 25 25 25 % % % % % % Partner's share of liabilities at year end: Nonrecourse . . . . . . . $ Recourse . $ . $ Current year increase (decrease) . $ Withdrawals & distributions . . $ ( . . $ . . . . . . 14 $ Qualified nonrecourse financing . Capital contributed during the year Ending capital account . Tax basis . GAAP Self-employment earnings (loss) *See attached statement for additional information. Partner's capital account analysis: Beginning capital account . $ ) Section 704(b) book Other (explain) M . Partner's share of profit, loss, and capital (see instructions): Beginning Ending Profit L 8 Partner's name, address, city, state, and ZIP code General partner or LLC member-manager K Royalties Partner's identifying number G J 7 For IRS Use Only C Did the partner contribute property with a built-in gain or loss? Yes No If \"Yes,\" attach statement (see instructions) For Paperwork Reduction Act Notice, see Instructions for Form 1065. IRS.gov/form1065 Cat. No. 11394R Schedule K-1 (Form 1065) 2016 Schedule K-1 (Form 1065) 2016 Page This list identifies the codes used on Schedule K-1 for all partners and provides summarized reporting information for partners who file Form 1040. For detailed reporting and filing information, see the separate Partner's Instructions for Schedule K-1 and the instructions for your income tax return. 1. Ordinary business income (loss). Determine whether the income (loss) is passive or nonpassive and enter on your return as follows. Report on See the Partner's Instructions Passive loss Passive income Schedule E, line 28, column (g) Nonpassive loss Schedule E, line 28, column (h) Nonpassive income Schedule E, line 28, column (j) 2. Net rental real estate income (loss) See the Partner's Instructions 3. Other net rental income (loss) Net income Schedule E, line 28, column (g) Net loss See the Partner's Instructions 4. Guaranteed payments Schedule E, line 28, column (j) 5. Interest income Form 1040, line 8a 6a. Ordinary dividends Form 1040, line 9a 6b. Qualified dividends Form 1040, line 9b Schedule E, line 4 7. Royalties 8. Net short-term capital gain (loss) Schedule D, line 5 Schedule D, line 12 9a. Net long-term capital gain (loss) 9b. Collectibles (28%) gain (loss) 28% Rate Gain Worksheet, line 4 (Schedule D instructions) 9c. Unrecaptured section 1250 gain See the Partner's Instructions 10. Net section 1231 gain (loss) See the Partner's Instructions 11. Other income (loss) Code A Other portfolio income (loss) See the Partner's Instructions B Involuntary conversions See the Partner's Instructions C Sec. 1256 contracts & straddles Form 6781, line 1 D Mining exploration costs recapture See Pub. 535 E Cancellation of debt Form 1040, line 21 or Form 982 F Other income (loss) See the Partner's Instructions 12. Section 179 deduction See the Partner's Instructions 13. Other deductions A Cash contributions (50%) B Cash contributions (30%) C Noncash contributions (50%) D Noncash contributions (30%) See the Partner's E Capital gain property to a 50% Instructions organization (30%) F Capital gain property (20%) G Contributions (100%) H Investment interest expense Form 4952, line 1 I Deductionsroyalty income Schedule E, line 19 J Section 59(e)(2) expenditures See the Partner's Instructions K Deductionsportfolio (2% floor) Schedule A, line 23 L Deductionsportfolio (other) Schedule A, line 28 M Amounts paid for medical insurance Schedule A, line 1 or Form 1040, line 29 N Educational assistance benefits See the Partner's Instructions O Dependent care benefits Form 2441, line 12 P Preproductive period expenses See the Partner's Instructions Q Commercial revitalization deduction See Form 8582 instructions from rental real estate activities R Pensions and IRAs See the Partner's Instructions S Reforestation expense deduction See the Partner's Instructions T Domestic production activities information See Form 8903 instructions U Qualified production activities income Form 8903, line 7b V Employer's Form W-2 wages Form 8903, line 17 W Other deductions See the Partner's Instructions 14. Self-employment earnings (loss) Note: If you have a section 179 deduction or any partner-level deductions, see the Partner's Instructions before completing Schedule SE. A Net earnings (loss) from self-employment Schedule SE, Section A or B B Gross farming or fishing income See the Partner's Instructions C Gross non-farm income See the Partner's Instructions 15. Credits A Low-income housing credit (section 42(j)(5)) from pre-2008 buildings B Low-income housing credit (other) from pre-2008 buildings C Low-income housing credit (section 42(j)(5)) from See the Partner's Instructions post-2007 buildings D Low-income housing credit (other) from post-2007 buildings E Qualified rehabilitation expenditures (rental real estate) F Other rental real estate credits G Other rental credits H Undistributed capital gains credit Form 1040, line 73; check box a I Biofuel producer credit J Work opportunity credit See the Partner's Instructions K Disabled access credit } } } 16. } Report on Code L Empowerment zone employment credit M Credit for increasing research activities See the Partner's Instructions N Credit for employer social security and Medicare taxes O Backup withholding P Other credits Foreign transactions A Name of country or U.S. possession B Gross income from all sources Form 1116, Part I C Gross income sourced at partner level Foreign gross income sourced at partnership level D Passive category E General category Form 1116, Part I F Other Deductions allocated and apportioned at partner level Form 1116, Part I G Interest expense H Other Form 1116, Part I Deductions allocated and apportioned at partnership level to foreign source income I Passive category J General category Form 1116, Part I K Other Other information L Total foreign taxes paid Form 1116, Part II M Total foreign taxes accrued Form 1116, Part II N Reduction in taxes available for credit Form 1116, line 12 Form 8873 O Foreign trading gross receipts P Extraterritorial income exclusion Form 8873 Q Other foreign transactions See the Partner's Instructions Alternative minimum tax (AMT) items A Post-1986 depreciation adjustment See the Partner's B Adjusted gain or loss C Depletion (other than oil & gas) Instructions and D Oil, gas, & geothermalgross income the Instructions for E Oil, gas, & geothermaldeductions Form 6251 F Other AMT items Tax-exempt income and nondeductible expenses A Tax-exempt interest income Form 1040, line 8b B Other tax-exempt income See the Partner's Instructions C Nondeductible expenses See the Partner's Instructions Distributions A Cash and marketable securities B Distribution subject to section 737 See the Partner's Instructions C Other property Other information A Investment income Form 4952, line 4a B Investment expenses Form 4952, line 5 Form 4136 C Fuel tax credit information D Qualified rehabilitation expenditures See the Partner's Instructions (other than rental real estate) E Basis of energy property See the Partner's Instructions F Recapture of low-income housing Form 8611, line 8 credit (section 42(j)(5)) G Recapture of low-income housing Form 8611, line 8 credit (other) H Recapture of investment credit See Form 4255 I Recapture of other credits See the Partner's Instructions J Look-back interestcompleted long-term contracts See Form 8697 K Look-back interestincome forecast method See Form 8866 L Dispositions of property with section 179 deductions M Recapture of section 179 deduction N Interest expense for corporate partners O Section 453(l)(3) information P Section 453A(c) information Q Section 1260(b) information R Interest allocable to production See the Partner's expenditures Instructions S CCF nonqualified withdrawals T Depletion informationoil and gas U Reserved V Unrelated business taxable income W Precontribution gain (loss) X Section 108(i) information Y Net investment income Z Other information } } } 17. 18. 19. 20. } } } 2 651113 Final K-1 2016 Schedule K-1 (Form 1065) Department of the Treasury Internal Revenue Service Part III Partner's Share of Current Year Income, Deductions, Credits, and Other Items For calendar year 2016, or tax year beginning ending A B 1 Ordinary business income (loss) 2 Net rental real estate income (loss) 3 Other net rental income (loss) 4 Guaranteed payments 5 Interest income 6a Ordinary dividends 6b Qualified dividends 15 Credits 16 Foreign transactions 17 Alternative minimum tax (AMT) items 18 Tax-exempt income and nondeductible expenses 19 Distributions 20 Other information , 2016 , 20 Partner's Share of Income, Deductions, See back of form and separate instructions. Credits, etc. Part I OMB No. 1545-0123 Amended K-1 Information About the Partnership Partnership's employer identification number Partnership's name, address, city, state, and ZIP code Stan Lee D IRS Center where partnership filed return Check if this is a publicly traded partnership (PTP) Part II E F Information About the Partner Limited partner or other LLC member H Domestic partner Foreign partner I1 What type of entity is this partner? I2 If this partner is a retirement plan (IRA/SEP/Keogh/etc.), check here . . . . . . . . . . . . . . . . . . 75 75 75 Loss Capital Net short-term capital gain (loss) 9a Net long-term capital gain (loss) 9b Collectibles (28%) gain (loss) 9c Unrecaptured section 1250 gain 10 Net section 1231 gain (loss) 11 Other income (loss) 12 Section 179 deduction 13 Other deductions 75 75 75 % % % % % % Partner's share of liabilities at year end: Nonrecourse . . . . . . . $ Recourse . $ . $ Current year increase (decrease) . $ Withdrawals & distributions . . $ ( . . $ . . . . . . 14 $ Qualified nonrecourse financing . Capital contributed during the year Ending capital account . Tax basis . GAAP Self-employment earnings (loss) *See attached statement for additional information. Partner's capital account analysis: Beginning capital account . $ ) Section 704(b) book Other (explain) M . Partner's share of profit, loss, and capital (see instructions): Beginning Ending Profit L 8 Partner's name, address, city, state, and ZIP code General partner or LLC member-manager K Royalties Partner's identifying number G J 7 For IRS Use Only C Did the partner contribute property with a built-in gain or loss? Yes No If \"Yes,\" attach statement (see instructions) For Paperwork Reduction Act Notice, see Instructions for Form 1065. IRS.gov/form1065 Cat. No. 11394R Schedule K-1 (Form 1065) 2016 Schedule K-1 (Form 1065) 2016 Page This list identifies the codes used on Schedule K-1 for all partners and provides summarized reporting information for partners who file Form 1040. For detailed reporting and filing information, see the separate Partner's Instructions for Schedule K-1 and the instructions for your income tax return. 1. Ordinary business income (loss). Determine whether the income (loss) is passive or nonpassive and enter on your return as follows. Report on See the Partner's Instructions Passive loss Passive income Schedule E, line 28, column (g) Nonpassive loss Schedule E, line 28, column (h) Nonpassive income Schedule E, line 28, column (j) 2. Net rental real estate income (loss) See the Partner's Instructions 3. Other net rental income (loss) Net income Schedule E, line 28, column (g) Net loss See the Partner's Instructions 4. Guaranteed payments Schedule E, line 28, column (j) 5. Interest income Form 1040, line 8a 6a. Ordinary dividends Form 1040, line 9a 6b. Qualified dividends Form 1040, line 9b Schedule E, line 4 7. Royalties 8. Net short-term capital gain (loss) Schedule D, line 5 Schedule D, line 12 9a. Net long-term capital gain (loss) 9b. Collectibles (28%) gain (loss) 28% Rate Gain Worksheet, line 4 (Schedule D instructions) 9c. Unrecaptured section 1250 gain See the Partner's Instructions 10. Net section 1231 gain (loss) See the Partner's Instructions 11. Other income (loss) Code A Other portfolio income (loss) See the Partner's Instructions B Involuntary conversions See the Partner's Instructions C Sec. 1256 contracts & straddles Form 6781, line 1 D Mining exploration costs recapture See Pub. 535 E Cancellation of debt Form 1040, line 21 or Form 982 F Other income (loss) See the Partner's Instructions 12. Section 179 deduction See the Partner's Instructions 13. Other deductions A Cash contributions (50%) B Cash contributions (30%) C Noncash contributions (50%) D Noncash contributions (30%) See the Partner's E Capital gain property to a 50% Instructions organization (30%) F Capital gain property (20%) G Contributions (100%) H Investment interest expense Form 4952, line 1 I Deductionsroyalty income Schedule E, line 19 J Section 59(e)(2) expenditures See the Partner's Instructions K Deductionsportfolio (2% floor) Schedule A, line 23 L Deductionsportfolio (other) Schedule A, line 28 M Amounts paid for medical insurance Schedule A, line 1 or Form 1040, line 29 N Educational assistance benefits See the Partner's Instructions O Dependent care benefits Form 2441, line 12 P Preproductive period expenses See the Partner's Instructions Q Commercial revitalization deduction See Form 8582 instructions from rental real estate activities R Pensions and IRAs See the Partner's Instructions S Reforestation expense deduction See the Partner's Instructions T Domestic production activities information See Form 8903 instructions U Qualified production activities income Form 8903, line 7b V Employer's Form W-2 wages Form 8903, line 17 W Other deductions See the Partner's Instructions 14. Self-employment earnings (loss) Note: If you have a section 179 deduction or any partner-level deductions, see the Partner's Instructions before completing Schedule SE. A Net earnings (loss) from self-employment Schedule SE, Section A or B B Gross farming or fishing income See the Partner's Instructions C Gross non-farm income See the Partner's Instructions 15. Credits A Low-income housing credit (section 42(j)(5)) from pre-2008 buildings B Low-income housing credit (other) from pre-2008 buildings C Low-income housing credit (section 42(j)(5)) from See the Partner's Instructions post-2007 buildings D Low-income housing credit (other) from post-2007 buildings E Qualified rehabilitation expenditures (rental real estate) F Other rental real estate credits G Other rental credits H Undistributed capital gains credit Form 1040, line 73; check box a I Biofuel producer credit J Work opportunity credit See the Partner's Instructions K Disabled access credit } } } 16. } Report on Code L Empowerment zone employment credit M Credit for increasing research activities See the Partner's Instructions N Credit for employer social security and Medicare taxes O Backup withholding P Other credits Foreign transactions A Name of country or U.S. possession B Gross income from all sources Form 1116, Part I C Gross income sourced at partner level Foreign gross income sourced at partnership level D Passive category E General category Form 1116, Part I F Other Deductions allocated and apportioned at partner level Form 1116, Part I G Interest expense H Other Form 1116, Part I Deductions allocated and apportioned at partnership level to foreign source income I Passive category J General category Form 1116, Part I K Other Other information L Total foreign taxes paid Form 1116, Part II M Total foreign taxes accrued Form 1116, Part II N Reduction in taxes available for credit Form 1116, line 12 Form 8873 O Foreign trading gross receipts P Extraterritorial income exclusion Form 8873 Q Other foreign transactions See the Partner's Instructions Alternative minimum tax (AMT) items A Post-1986 depreciation adjustment See the Partner's B Adjusted gain or loss C Depletion (other than oil & gas) Instructions and D Oil, gas, & geothermalgross income the Instructions for E Oil, gas, & geothermaldeductions Form 6251 F Other AMT items Tax-exempt income and nondeductible expenses A Tax-exempt interest income Form 1040, line 8b B Other tax-exempt income See the Partner's Instructions C Nondeductible expenses See the Partner's Instructions Distributions A Cash and marketable securities B Distribution subject to section 737 See the Partner's Instructions C Other property Other information A Investment income Form 4952, line 4a B Investment expenses Form 4952, line 5 Form 4136 C Fuel tax credit information D Qualified rehabilitation expenditures See the Partner's Instructions (other than rental real estate) E Basis of energy property See the Partner's Instructions F Recapture of low-income housing Form 8611, line 8 credit (section 42(j)(5)) G Recapture of low-income housing Form 8611, line 8 credit (other) H Recapture of investment credit See Form 4255 I Recapture of other credits See the Partner's Instructions J Look-back interestcompleted long-term contracts See Form 8697 K Look-back interestincome forecast method See Form 8866 L Dispositions of property with section 179 deductions M Recapture of section 179 deduction N Interest expense for corporate partners O Section 453(l)(3) information P Section 453A(c) information Q Section 1260(b) information R Interest allocable to production See the Partner's expenditures Instructions S CCF nonqualified withdrawals T Depletion informationoil and gas U Reserved V Unrelated business taxable income W Precontribution gain (loss) X Section 108(i) information Y Net investment income Z Other information } } } 17. 18. 19. 20. } } } 2 Tax Return Problem Partnership Instructions: Please complete Deliveries R US' 2016 tax return based upon the facts presented below. If required information is missing, use reasonable assumptions to fill in the gaps. Stan Lee has known Frank Mogato for years. DRU has several employees and because of implementing technology solutions to aid in its programs, it has been able to expand its service area to now include a three-county area instead of just one. Information relating to DRU and its owners is as follows: Name of Company: Address: Company formed and started: Accounting Method: Tax-year end: Employer Identification Number: Deliveries R US LLC 30 North Wendall Way. Miami, FL 33126 01/01/2015 Cash December 31 12-1234567 Members' Information: Stan Lee 453 75th Street North Miami, FL 33441 SSN- 585-31-6060 Profit/Loss/Capital membership interest is 75%. Tax Matters Partner Frank Mogato 7431 Way Street Miami Beach, FL 33213 SSN: 397-29-9239 Profit/Loss/Capital membership interest is 25%. Other information: On January 1, 2016 Stan Lee and Rignad Kcin were partners. On that same day Rignad's partnership interest was terminated. On that same day Frank Mogato was admitted as a partner. There was a technical termination of the previous partnership for part of the day of January 1, 2016. Simultaneous with the buyout Frank Mogato received a 25% Partnership Interest (Profit/Loss/Capital worth $125,000) for $25,000 of cash and for services to be rendered which were valued at 100,000. The services will be shown as guaranteed payments. On 1/1/2016 Stan Lee contributed a building which had been acquired on March 15, 2015, to the partnership that had originally been purchased for $375,000. The allocated purchase price was Building $300,000 and Land of $75,000. Accumulated depreciation as of 01/01/2016 was $44,550 using SL and the Mid-Month Depreciation Convention. The building has a 39-year useful life for book and tax purposes. The property had a $137,067 mortgage (Qualified Nonrecourse Indebtedness) on it when it was contributed. The fair market value on the date of contribution to the partnership was $650,000. The mortgage monthly payments were $1,479. The mortgage interest expense for 2016 amounted to $5,255. The company uses the tax basis of accounting. DRU is a domestic limited liability company The partners are not related. The partners are both U.S. citizens. Stan is the managing member. DRU has not and did not file a Form 8893 or anything similarto it this year or in the past. DRU is not a publicly traded partnership. DRU is not required to file a Form 8918. DRU did not have or control a foreign bank account or have authority over any such financial account. DRU was not the grantor of or a transferor to a foreign trust. DRU has never made a Section 754 election. DRU has never entered a like-kind exchange or distributed a tenancy-in-common or other undivided interest in partnership property. DRU has never been required to file Form 8858. DRU 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. DRU was not required to file any Form(s) 5471 or 8865 during the year. Stan is the Tax Matters Partner (TMP). Both partners are active in the business and work full-time for DRU. The debt owed to the Fifth Third Bank is a non-recourse obligation and neither Stan nor Frank have guaranteed its repayment (see balance sheet attached). 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 Stan nor Frank is personally responsible for its repayment. DRU is not subject to 163(a) and uses the lower of cost or market for inventory purposes. You will need to prepare a form 1125-A. DRU uses MACRS depreciation for both tax and book purposes. During the year, Stan received a distribution of $100,000 and Frank received a distribution of $35,000 from DRU. The accumulated depreciation for both regular tax and AMT at 12/31/15 was $63,208. During the year, DRU acquired the following assets (all assets were placed in service on the acquisition dates as indicated below): o Service vans-new (not Luxury Automobiles) July 1, 2016 $250,000 o New equipment July 1, 2016 $125,000 DRU will not claim 179 depreciation but will otherwise maximize depreciation. The service vans will be used 100% for business purposes and remain at the company premises in the evenings. There is a company policy that these vans will not be used for any personal purposes. In addition to preparing the tax return you will also be expected to calculate the Outside Basis of the partners as well as the Inside Basis at the end of 2016. A form is provided to assist you with the calculation. DRU had interest Municipal Bond Interest from Muni King. Of the TE income $3,700 was from private activity bonds. Required: 1. Prepare a 1065 including any necessary K-1 forms 2. Prepare K-1 forms including items K and L