In January of $2022,$ three taxpayers decided to form a partnership. The partnership manufactures exercise equipment for sale in the U$.$S$.$

The first partner, Emmanuel Corporation $($with a tax year ending on April $30),$ contributed machinery used in its business. The machinery $($purchased in $2019)$ had a basis of $$30,000$ and a fair market value of $$55,000.$ The machinery was subject to a non$-$recourse liability that the partnership agreed to assume. In return, Emmanuel Corporation received a $45\%$ interest in the capital and profits of the partnership.

The second partner, Kelly $($a cash basis taxpayer with a tax year ending on September $30),$ contributed accounts receivable with a fair market value of $$35,000.$ In return, She received a $35\%$ interest in capital and profits.

The final partner, Nick $($a cash basis taxpayer who used the calendar year$),$ contributed a car used in his business in return for a $20\%$ interest in the capital and profits of the partnership. The car was originally purchased for $$45,000$ in $2018$ and had a basis of $$25,000$ when Nick transferred it to the partnership.

After forming, the partnership began to prepare for starting its operations. The partnership began business on June $1,2022.$ In preparing to begin business, the partnership incurred qualified organizational expenses of $$51,800.$

In addition to the organizational expenses, the partnership had the following items of income$/$expense during the year:

At the end of the year, they had the following.

Net Sales $$150,000*$

Dividends $40,000$

Sec. $1231$ gains $40,000$

Sec. $1245$ gains $5,000$

Long$-$term capital losses $(20,000)$

$*$Assume that the net sales includes W$-2$ wages of $$40,000$ paid to employees as one of the ordinary expenses offsetting the sales.

Prepare the tax workpapers, including an Excel document, in which you write up the following and show work:

Part A: Your determination of each partner$$s basis and holding period in their partnership interest after formation.

Part B: The accounting period the partnership will be required to use.

Part C: The calculation of the basis and return effects for Miller Corporation for the income and expenses of the partnership during the year. Be sure to distinguish the ordinary income$/$expenses from the separately stated items. $($Show ordinary and seperately stated items$)$

Part D: Your calculation of Nick's Sec. $199$A deduction on his individual tax return, assuming that he's single, and has gross income of $$275,000$ before considering any of the transactions involving the partnership. Don$$t forget that the partnership manufactures exercise equipment for sale in the U$.$S$.$