For the following questions:

Mike, Matt, Brooke, and Kellie decide to go into business together. They contribute the following amounts:

Mike - 30,000

Matt - 12,000

Brooke - 12,000

Kellie - 6,000

In the first year of operations, the company had the following items of income and expense:

Service Income - 160,000

Service Expenses - 24,000

Depreciation - 28,000

In the second year of operations, the company had the following items of income and expense:

Service Income - 130,000

Service Expenses - 24,000

Depreciation - 18,000

In the third year of operations, the company had the following items of income and expense:

Service Income - 275,000

Service Expenses - 34,000

Depreciation - 22,000

In the fourth year of operations, the company had the following items of income and expense:

Service Income - 210,000

Service Expenses - 54,000

Depreciation - 18,000

They form a limited partnership where Mike, Matt, and Brooke are the limited partners. Additionally, the partnership agreement states that all profits are to be distributed equally. Mike will perform high level management services for the company and will be paid $100,000 a year for those services. The company will be able to deduct this amount from net income. In year 2, Matt takes a distribution of $75,000. (20 pts)

a) Calculate the amount of any Payroll tax in Year 3 paid by Mike.

b) Calculate the amount, if any, subject to Income Tax in Year 2 for Matt.

c) Calculate the maximum amount that Kellie can withdraw without having a gain in excess of basis in year 3.

d) Calculate Brookes ending basis for year 4.