Partnership Tax Return

INSTRUCTIONS

Please use the information below to complete the Form 1065 and the Schedule K-1 for Malcolm Fox only. Blank forms can be found on the IRS site or Doc Sharing. Please feel free to use a tax software package if you have one, but be aware that I will not be able to answer specific questions about it.

GENERAL COMPANY INFORMATION

Malcolm Fox and Rhonda Ford are equal partners in MFRF LLP, a small business consulting firm. The partners are not related and are all U.S. citizens. Malcolm Fox lives at 415 Knight Court in Freeport, ME, 04469, with a Social Security number of 123-45-6789. Rhonda Ford lives at 123 Main Street in Freeport, ME, 04469, with a Social Security number of 456-12-4561.

The limited liability partnership uses the cash basis and the calendar year and began operation on January 1, 2009. The Federal ID for MFRF LLP is 11-1111111 and the current address is 2835 Harbor View Drive, Freeport, ME, 04469 for.

The partnership placed its $65,000 of furniture and fixtures in service on January 1, 2009. This year, it claimed $8,119 of depreciation expense for tax (line 16a and 16c) and financial purposes. No assets were placed in service in the current year.

On Oct. 15, the partnership sold securities, creating a $4,000 long term capital loss. Please enter this directly onto schedule K; there is not enough information to create the detail.

Net income per books is $200,900. On January 1, 2012, the partners capital accounts equal $120,000 each. No additional capital contributions were made in 2012 and each partner made withdrawals of $120,000 during the year.

MFRF LLP Income Statement

Revenues

Fees collected 800,000

Dividend income (all qualified) 3,600

Taxable business interest 1,400

Tax-exempt interest 2,600

Long-term capital loss (4,000)

Total revenues 803,600

Expenses

Accounting fees 12,000

Advertising 5,000

Contribution to United Way 2,000

Depreciation expense 8,119

Employee salaries 340,000

Guaranteed payments 140,000

Entertainment 2,600

Travel 12,000

Equipment rental 6,000

Office rentals paid 7,000

Interest expense 4,000

Insurance premiums 2,200

Office expense 20,481

Payroll taxes 25,600

Utilities 15,700

Total expenses 602,700

MFRF LLP Balance Sheet

Assets January 1, 2012 December 31, 2012

Cash $86,576 $84,595

Tax-exempt securities 52,000 52,000

Marketable securities 120,000 76,000

Furniture and equipment 65,000 65,000

Accumulated depreciation (36,576) (44,695)

Total assets $287,000 $232,900

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Liabilities and Equity January 1, 2012 December 31, 2012

Nonrecourse debt on

Equipment $47,000 $32,000

Capital, Fox 120,000 100,450

Capital, Ford 120,000 100,450

Total Liabilities and Equity $287,000 $232,900

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Partnership Tax Return INSTRUCTIONS Please use the information below to complete the Form 1065 and the Schedule K-1 for Malcolm Fox only. Blank forms can be found on the IRS site or Doc Sharing. Please feel free to use a tax software package if you have one, but be aware that I will not be able to answer specific questions about it. GENERAL COMPANY INFORMATION Malcolm Fox and Rhonda Ford are equal partners in MFRF LLP, a small business consulting firm. The partners are not related and are all U.S. citizens. Malcolm Fox lives at 415 Knight Court in Freeport, ME, 04469, with a Social Security number of 123-45-6789. Rhonda Ford lives at 123 Main Street in Freeport, ME, 04469, with a Social Security number of 456-12-4561. The limited liability partnership uses the cash basis and the calendar year and began operation on January 1, 2009. The Federal ID for MFRF LLP is 111111111 and the current address is 2835 Harbor View Drive, Freeport, ME, 04469 for. The partnership placed its $65,000 of furniture and fixtures in service on January 1, 2009. This year, it claimed $8,119 of depreciation expense for tax (line 16a and 16c) and financial purposes. No assets were placed in service in the current year. On Oct. 15, the partnership sold securities, creating a $4,000 long term capital loss. Please enter this directly onto schedule K; there is not enough information to create the detail. Net income per books is $200,900. On January 1, 2012, the partners' capital accounts equal $120,000 each. No additional capital contributions were made in 2012 and each partner made withdrawals of $120,000 during the year. MFRF LLP Income Statement Revenues Fees collected 800,000 Dividend income (all qualified) 3,600 Taxable business interest 1,400 Tax-exempt interest 2,600 Long-term capital loss (4,000) Total revenues 803,600 Expenses Accounting fees 12,000 Advertising 5,000 Contribution to United Way 2,000 Depreciation expense 8,119 Employee salaries 340,000 Guaranteed payments 140,000 Entertainment 2,600 Travel 12,000 Equipment rental 6,000 Office rentals paid 7,000 Interest expense 4,000 Insurance premiums 2,200 Office expense 20,481 Payroll taxes 25,600 Utilities 15,700 Total expenses 602,700 MFRF LLP Balance Sheet Assets January 1, 2012 December 31, 2012 Cash Tax-exempt securities Marketable securities Furniture and equipment Accumulated depreciation Total assets $86,576 52,000 120,000 76,000 65,000 (36,576) $287,000 ====== Liabilities and Equity January 1, 2012 December 31, 2012 Nonrecourse debt on Equipment Capital, Fox Capital, Ford Total Liabilities and Equity $47,000 120,000 120,000 $287,000 ====== $84,595 52,000 65,000 (44,695) $232,900 ====== $32,000 100,450 100,450 $232,900 ======= 651111 Final K-1 2011 Schedule K-1 (Form 1065) Department of the Treasury Internal Revenue Service Part III Partner's Share of Current Year Income, Deductions, Credits, and Other Items For calendar year 2011, or tax year beginning , 20 Partner's Share of Income, Deductions, See back of form and separate instructions. Credits, etc. Part I A 1 Ordinary business income (loss) 2 Net rental real estate income (loss) Information About the Partnership 3 Other net rental income (loss) 4 Guaranteed payments Partnership's employer identification number 6a 2835 Harbor View Drive, Freeport, ME 04469 for MFRF, LLP. C 6b 16 Foreign transactions 140,000 $8,119 1,400 12,000 0 20,481 Interest income Ordinary dividends Qualified dividends 3,600 7 Royalties 8 Net short-term capital gain (loss) 9a Net long-term capital gain (loss) 0 0 Check if this is a publicly traded partnership (PTP) Part II 13,000 $65,000 IRS Center where partnership filed return D 8,00,000 2000 Partnership's name, address, city, state, and ZIP code MFRF, LLP Credits 13,000 5 B 15 86,576 , 2011 ending OMB No. 1545-0099 Amended K-1 Information About the Partner 17 Alternative minimum tax (AMT) items 4,000 E Partner's identifying number 9b Collectibles (28%) gain (loss) F Partner's name, address, city, state, and ZIP code 9c Unrecaptured section 1250 gain 10 Net section 1231 gain (loss) 11 Other income (loss) 25,600 2,24,0000 1.)Malcolm Fox ,415 Knight Court in Freeport, ME 04469 Social security Security number of 123-45-6789. 2.)Rhonda Ford ,123 Main Street in Freeport, ME 04469 Social security Security number of 456-12-4561 0 18 $200,900 Tax-exempt income and nondeductible expenses 2,600 2,00,900 G General partner or LLC member-manager Limited partner or other LLC member H Domestic partner Foreign partner 52,000 8,119 Payroll Tax 25,600 19 12 I What type of entity is this partner? J Partner's share of profit, loss, and capital (see instructions): Beginning Ending 0 0 $120,000 Profit Loss Capital % . $ Qualified nonrecourse financing . $ Recourse . $ . $ Current year increase (decrease) . $ Withdrawals & distributions . . $ ( . . $ . . . . . . . % . . . GAAP Tax basis Other information 32,000 2,40,000 2,87,000 14 Self-employment earnings (loss) 0 Accounting fees 12,00 Advertising 5,000 *See attached statement for additional information. Capital contributed during the year Ending capital account . 20 Utilities 15,700 % Partner's capital account analysis: Beginning capital account . $1,20,000 $100,450 $19,550 $120,000 ) $3,60,000 $ Section 704(b) book Other (explain) M 0 % Equipment 47,000 . . . 2,000 Other deductions Partner's share of liabilities at year end: Nonrecourse L 13 For IRS Use Only K % 2,200 0 2,00,900 $4,000 $100,450 % Distributions Section 179 deduction Did the partner contribute property with a built-in gain or loss? No Yes If \"Yes,\" attach statement (see instructions) For Paperwork Reduction Act Notice, see Instructions for Form 1065. Cat. No. 11394R Schedule K-1 (Form 1065) 2011 Schedule K-1 (Form 1065) 2011 Page This list identifies the codes used on Schedule K-1 for all partners and provides summarized reporting information for partners who file Form 1040. For detailed reporting and filing information, see the separate Partner's Instructions for Schedule K-1 and the instructions for your income tax return. 1. Ordinary business income (loss). Determine whether the income (loss) is passive or nonpassive and enter on your return as follows. Report on See the Partner's Instructions Passive loss Passive income Schedule E, line 28, column (g) Nonpassive loss Schedule E, line 28, column (h) Nonpassive income Schedule E, line 28, column (j) 2. Net rental real estate income (loss) See the Partner's Instructions 3. Other net rental income (loss) Net income Schedule E, line 28, column (g) Net loss See the Partner's Instructions 4. Guaranteed payments Schedule E, line 28, column (j) 5. Interest income Form 1040, line 8a 6a. Ordinary dividends Form 1040, line 9a 6b. Qualified dividends Form 1040, line 9b Schedule E, line 3b 7. Royalties 8. Net short-term capital gain (loss) Schedule D, line 5 Schedule D, line 12 9a. Net long-term capital gain (loss) 9b. Collectibles (28%) gain (loss) 28% Rate Gain Worksheet, line 4 (Schedule D instructions) 9c. Unrecaptured section 1250 gain See the Partner's Instructions 10. Net section 1231 gain (loss) See the Partner's Instructions 11. Other income (loss) Code A Other portfolio income (loss) See the Partner's Instructions B Involuntary conversions See the Partner's Instructions C Sec. 1256 contracts & straddles Form 6781, line 1 D Mining exploration costs recapture See Pub. 535 E Cancellation of debt Form 1040, line 21 or Form 982 F Other income (loss) See the Partner's Instructions 12. Section 179 deduction See the Partner's Instructions 13. Other deductions A Cash contributions (50%) B Cash contributions (30%) C Noncash contributions (50%) D Noncash contributions (30%) See the Partner's E Capital gain property to a 50% Instructions organization (30%) F Capital gain property (20%) G Contributions (100%) H Investment interest expense Form 4952, line 1 I Deductionsroyalty income Schedule E, line 19 J Section 59(e)(2) expenditures See the Partner's Instructions K Deductionsportfolio (2% floor) Schedule A, line 23 L Deductionsportfolio (other) Schedule A, line 28 M Amounts paid for medical insurance Schedule A, line 1 or Form 1040, line 29 N Educational assistance benefits See the Partner's Instructions O Dependent care benefits Form 2441, line 12 P Preproductive period expenses See the Partner's Instructions Q Commercial revitalization deduction See Form 8582 instructions from rental real estate activities R Pensions and IRAs See the Partner's Instructions S Reforestation expense deduction See the Partner's Instructions T Domestic production activities See Form 8903 instructions information U Qualified production activities income Form 8903, line 7b V Employer's Form W-2 wages Form 8903, line 17 W Other deductions See the Partner's Instructions 14. Self-employment earnings (loss) Note. If you have a section 179 deduction or any partner-level deductions, see the Partner's Instructions before completing Schedule SE. A Net earnings (loss) from Schedule SE, Section A or B self-employment B Gross farming or fishing income See the Partner's Instructions C Gross non-farm income See the Partner's Instructions 15. Credits A Low-income housing credit (section 42(j)(5)) from pre-2008 buildings B Low-income housing credit (other) from pre-2008 buildings C Low-income housing credit (section 42(j)(5)) from See the Partner's Instructions post-2007 buildings D Low-income housing credit (other) from post-2007 buildings E Qualified rehabilitation expenditures (rental real estate) F Other rental real estate credits G Other rental credits H Undistributed capital gains credit Form 1040, line 71; check box a I Alcohol and cellulosic biofuel fuels See the Partner's Instructions credit } } } 16. Report on Code J Work opportunity credit K Disabled access credit L Empowerment zone and renewal community See the Partner's Instructions employment credit M Credit for increasing research activities N Credit for employer social security and Medicare taxes Form 1040, line 62 O Backup withholding P Other credits See the Partner's Instructions Foreign transactions A Name of country or U.S. possession B Gross income from all sources Form 1116, Part I C Gross income sourced at partner level Foreign gross income sourced at partnership level D Passive category E General category Form 1116, Part I F Other Deductions allocated and apportioned at partner level Form 1116, Part I G Interest expense H Other Form 1116, Part I Deductions allocated and apportioned at partnership level to foreign source income I Passive category J General category Form 1116, Part I K Other Other information L Total foreign taxes paid Form 1116, Part II M Total foreign taxes accrued Form 1116, Part II N Reduction in taxes available for credit Form 1116, line 12 Form 8873 O Foreign trading gross receipts P Extraterritorial income exclusion Form 8873 Q Other foreign transactions See the Partner's Instructions Alternative minimum tax (AMT) items A Post-1986 depreciation adjustment See the Partner's B Adjusted gain or loss C Depletion (other than oil & gas) Instructions and D Oil, gas, & geothermalgross income the Instructions for E Oil, gas, & geothermaldeductions Form 6251 F Other AMT items Tax-exempt income and nondeductible expenses A Tax-exempt interest income Form 1040, line 8b B Other tax-exempt income See the Partner's Instructions C Nondeductible expenses See the Partner's Instructions Distributions A Cash and marketable securities B Distribution subject to section 737 See the Partner's Instructions C Other property Other information A Investment income Form 4952, line 4a B Investment expenses Form 4952, line 5 Form 4136 C Fuel tax credit information D Qualified rehabilitation expenditures See the Partner's Instructions (other than rental real estate) E Basis of energy property See the Partner's Instructions F Recapture of low-income housing Form 8611, line 8 credit (section 42(j)(5)) G Recapture of low-income housing Form 8611, line 8 credit (other) H Recapture of investment credit See Form 4255 I Recapture of other credits See the Partner's Instructions J Look-back interestcompleted See Form 8697 long-term contracts K Look-back interestincome forecast See Form 8866 } } } 17. 18. 19. 20. } } method L Dispositions of property with section 179 deductions M Recapture of section 179 deduction N Interest expense for corporate partners O Section 453(l)(3) information P Section 453A(c) information Q Section 1260(b) information R Interest allocable to production expenditures S CCF nonqualified withdrawals T Depletion informationoil and gas U Amortization of reforestation costs V Unrelated business taxable income W Precontribution gain (loss) X Section 108(i) information Y Other information } See the Partner's Instructions 2