Form 1065 Practice Tax Return Facts in 2019: ABC LLP, a limited liability partnership, 123 Oak Dr Houston TX 77002 EIN-74-1111111 Date Business Started 1/1/2000 Business Activity: retail sales; Product: Family Clothing; Business code: 448140. The partnership is a cash basis business Total Assets $3,050,000 Gross Receipts $1,000,000 Cost of Goods Sold $400,000 (assume no beginning and ending inventory and purchases are $400,000) ABC LLP uses FIFO method for determining the cost of goods sold and the cash method for all other income and expenses. Guaranteed payment for services in the amount of $200,000 was paid to Bee o Hint: When using Tax Act, open up a Schedule K-1 for each partner. Then, enter guaranteed payment on Bee Jones K-1. The amount will carry over to the Form 1065, Schedule K. Bee is also the Tax Matters partner. Salaries and wages paid to employees was $50,000 Office Rent paid for home office was $10,000 Supplies expense totaled $40,000 Partner information is as follows: Partner Capital Profit Loss Residency SSN Address Bee Jones 40% 40% 40% TX 222-22-2222 124 Oak Dr, Hou. TX 77002 John Smith 40% 40% 40% TX 333-33-3333 125 Oak Dr, Hou. TX 77002 Julie Smart 20% 20% 20% TX 444-44-4444 126 Oak Dr Hou. TX 77002 All partners materially participate in the day-to-day partnership operations. All partners use their tax basis as their capital account balances. The partners beginning Capital Balances at 1/1/2019 are as follows: Partner Capital Balance Bee Jones $1,100,000 John Smith $1,100,000 Julie Smart $ 550,000 Assets: 1/1/2019 12/31/2019 Cash $ 250,000 $ 550000 Land $2,500,000 $2,500,000 Total assets $2,750,000 $3,050,000 Liabilities and Partners Capital Account Balances: Partners Capital Account Balances $2,750,000 $3,050,000 Total liabilities and shareholders equity $2,750,000 $3,050,000.

The partnership has engaged you to prepare the 2019 Form 1065. Include the Schedules K-1 and the Form 1125-A, Cost of Goods Sold. Assume the partnership has no debts. In answering questions on the tax return, you may make assumptions if the above facts arent providing you with the information