Can anyone answer this assignment and please write down why you have those answers? Thank you so much.

Tax II Fall 2017 Tax Assignment Well, it's been a busy day in your office. Here it is April 23, 2017. you're just past tax season and one of your 'colorful' clients has come in with tax problems seeking your advice. Ben Grimm comes to see you. Ben and his brother, Reilly, had formed \"It's Clobberin' Time, LLC\" (taxed as a partnership) several years ago to provide superheroes with anger management problems. Clients include Wolverine, Frank Castle and Bruce Banner (who has had aggression issues for years). Reilly advanced the financing as the facilities and 'clobberable' equipment is a material element of the operation, Ben the 'celebrity' status. Both he and Reilly provided significant services. Reilly owned a 40% interest and Ben 60%. However, on August 1 (2015) Ben gave his daughter, Trudy, a 30% interest. Trudy is in school full time and does not work at the LLC. Ben, Reilly, Trudy and the LLC report on the cash basis for accounting purposes. They provide only services so the LLC has no inventory. The IRS is auditing the firm's 2016 ending 1065 return, questioning three things. (1) Reilly died on September 15, 2016. While Ben, Trudy and Reilly are on a calendar year for tax purposes, the LLC is on a fiscal year (yes, it was IRS approved, even Ben can't clobber Uncle Sam) ending July 31. Ben is Reilly's beneficiary and executor, but Reilly's estate is still in administration. Ben included Reilly's share of the profits for the 7/31/2016 fiscal year on Reilly's 2016 final1040, but plans to put the income for the fiscal year ending this July (7/31/2017) on the estate 1041. The IRS agent said something about 'closing' the tax year but Ben is pretty sure that isn't rightthere were still two partners when Reilly died and he only owned 40%. Is Ben right? How should this be reported and why? (2) Ben had allocated the income for the 7/31/2016 return, 40% to Reilly, 30% to him and 30% to Trudy per their agreement and capital accounts. The LLC had a profit of $165,000. Income for the year was allocated $66,000 to Reilly and $49,500 each to Ben and Trudy. The agent said that Reilly's services were worth $40,000 and Ben's $35,000. He proposed to reallocate $10,000 to Reilly and $12,500 to Ben. What is the Agent talking about? What should each of them report on their respective 1040s for the 7/31/2016 fiscal year of the LLC? (3) Ten years ago the LLC purchased some land which it intended to use for its business. However, the EPA determined it was on a fault line and the effect of all that 'clobbering' could trigger an earthquake, so it has been held as investment property ever since. Three years ago Ben contributed some real estate he had held for investment for several years which the LLC now uses for its activities. Ben has been thinking about starting a health club for overworked superheroes and has asked that the unused land be distributed to him. He convinced Johnny Storm to join him to provide really hot saunas and Bruce Banner's cousin, Jennifer, to provide really deep massages. Ben says his outside basis is greater than the inside basis of the land to the LLC (although the FMV of the land is in excess of his outside basis) so he won't have any adverse tax consequences as a result of the distribution right??? Project Write Ben a letter advising him on these three topics. As a general form, cite the facts you are relying on (from those abovedo not guess), the issues which you see, and then discuss and explain each issue to him together with any advice as to how he should handle it. Ben is not seeking any tax calculations, however, if there is sufficient information you can do so if you feel this would make the explanation easier. If you spot issues but are unsure if they affect him, tell him what additional information or facts you need to make a determination and why---how will the determination affect him