im Smith, a client of yours, has asked you to prepare the tax return for the current year for BJS, LLC, of which he is a member. This is the first year of operations for BJS, LLC. Jim has contributed cash in the amount of $1,500,000. In addition, Betsy Smith, Jim's daughter, has contributed cash in the amount of $1,200,000. Sandco Industries, Inc., a C-corporation, decided to become a member of BJS, LLC by contributing its land in Texas, which has a basis of $1,250,000 and a fair-market value of $1,300,000. The Johnson Neuman Trust contributed cash to BJS, LLC in the amount of $700,000. A C-Corporation named Tiger, Inc. contributed $500,000 cash. The Articles of Incorporation for BJS, LLC states that profit and loss will be in proportion to the capital contribution. Financial data for BJS, LLC for the current tax year is as follows: Gross Income from operations: $755,000 Payroll expenses: $55,000 Rent expense: $150,000 BJS, LLC also purchased a company vehicle for $45,000 using cash on 12/31/20XX (most recent year end).

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