Question
Kim received a 1/3 profits and capital interest in Bright Line, LLC in exchange for legal services she provided. In addition to her share of
Kim received a 1/3 profits and capital interest in Bright Line, LLC in exchange for legal services she provided. In addition to her share of partnership profits or losses, she receives a $34,000 guaranteed payment each year for ongoing services she provides to the LLC. For X4, Bright Line reported the following revenues and expenses: Sales - $154,000, Cost of Goods Sold - $94,000, Depreciation Expense - $50,000, Long-Term Capital Gains - $19,000, Qualified Dividends - $6,400, and Municipal Bond Interest - $3,400. How much ordinary business income (loss) will Bright Line allocate to Kim on her Schedule K-1 for X4?
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($24,000).
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$200.
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$3,600.
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$10,000.
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None of the choices will be reported as ordinary business income (loss) on Schedule K-1.
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