Please answer all parts

Problem 10-37 (Algorithmic) (LO. 6, 7, 8, 9, 10, 11) Amy and Mitchell share equally (50%) in the profits, losses, and capital of the accrual basis AM Products LLC. The LLC does not need to report financial information to any third parties, so capital accounts are determined using tax rules (rather than GAAP). Amy is a managing member of the LLC (treated as a general partner) and is a U.S. person. At the beginning of the current tax year, Amy's capital account has a balance of $556,000, and the LLC has debts of $361,400 payable to unrelated parties. All debts are recourse to the LLC, but neither of the LLC members has personally guaranteed them. The following information about AM's operations for the current year is obtained from the LLC's records. Operating Income $834,000 W-2 wages 200,000 Depreciation expense 300,000 Interest income 8,340 Long-term capital loss 5,560 Long-term capital gain 16,680 Charitable contribution (cash) Cash distribution to Amy 41,700 Unadjusted basis of partnership property 1,600,000 immediately after acquisition 8,390 Operating income equals revenue less operating expenses (other than expenses listed separately above). Year-end LLC debt payable to unrelated parties is $252,980. Assume that all transactions are reflected in Amy's beginning capital and basis In the same manner. Also assume that all AM Products activities are eligible for the qualified business income deduction a. Calculate Amy's basis in her LLC Interest at the beginning and end of the tax year. Use her capital account as a starting point. LLC interest at the beginning of the year: LLC interest at the end of the years b. What income, gains, losses, and deductions does Amy report on her income tax return? If an amount is zero, enter "0". Ordinary income eBook b. What income, gains, losses, and deductions does Amy report on her income tax return? If an amount is zero, enter "o". Ordinary income Net long-term capital gain Interest Income IIIII Charitable contribution deduction Cash distribution c. Based on the information provided, what other calculations is Amy required to make? Amy may be eligible to deduct up to % of the ordinary income as qualified business income under 5 199A and will make that calculation on her return. This deduction require a cash outflow by Amy or the LLC, and it affect her basis or capital account. As someone treated as a general partner, Amy's distributive share of the LLC's ordinary business income subject to self-employment tax and possibly the additional Medicare tax. Her from the LLC may be subject to the additional tax under $ 1411. d. Prepare Amy's tax basis capital account rolforward from the beginning to the end of the tax year. How does her ending capital account differ from her ending tax basis in the LLC interest as calculated in part (a)? Capital account balance, beginning year Ordinary income Interest income Net long-term capital gain d. Prepare Amy's tax basis capital account rollforward from the beginning to the end of the tax year. How does her ending capital account differ from her ending tax basis in the LLC interest as calculated in part (a)? Capital account balance, beginning year Ordinary income Interest income Net long-term capital gain Less: Charitable contribution Cash distribution to Amy Capital account balance, end of year Amy's capital account differs from her basis only by the amount of her share of LLC e. Using the information from parts (a) to (d), prepare Amy's Schedule K-1 as if you were the preparer of AM Products LLC's tax retum. Provide all information that Amy needs to the extent you can Enter all amounts as positive numbers. Final K-1 651119 Amended K 1 OMB No 1545-0123 Partner's Share of Current Year Income, Deductions, Credits, and Other Items Part III 2020 Schedule K-1 (Form 1065) All work saved e. Using the information from parts () to (d), prepare Amy's Schedule K-1 as if you were the preparer of AM Products LLC's tax return. Provide all information that Amy needs to the extent you can Enter all amounts as positive numbers. Schedule K-1 (Form 1065) 2020 651119 - Final K-1 Amended K-1 OMB No. 1545-0123 Part III Partner's Share of Current Year Income, Deductions, Credits, and other items 1 Ordinary business income 15 Credits (loss) For calendar year 2020. or tax year Department of the Treasury Internal Revenue Service beginning / / 2020 ending 2 Net rental real estate income (loss) Partner's Share of Income, Deductions, Credits, etc. See separate instructions. Part 1 Information About the Partnership A Partnership's employer identification number 3 other net rental income (loss) 16 Foreion transactions 40 Guaranteed payments for services 4b Guaranteed payments for capital 4c Partnership's name, address, city, state, and ZIP code AM Products, LLC IRS Center where partnership filed return Check if this is a publicy traded partnership (PTP) Part II Information about the Partner Partner's SSN or TIN (Do not use TIN of a disregarded entity. See inst.) Total guaranteed payments D 5 Interest inconte E 6a Ordinary dividende ob Qualified dividends Name, address, city, state, and ZIP code for partner entered in E. See instructions Anvy 6c Dividend equivalents 17 Alternative minimum tax (AMT) items See instructions. Amy 6C Dividend equivalents 17 Alternative minimum tax (AMT) items 7 Royalties G General partner or LLC member. Limited partner or other LLC manager member H1 Domestic partner Foreign partner H2 - If the partner is a disregarded entity (DE), enter the partner's: TIN Name 8 Net short-term capital gain (loss) 9a Net. long-term capital gain (loss) 18 Tax-exempt Income and nondeductible expenses 11 What type of entity is this partner? 12 If this partner is a retirement plan (IRA/SEP/Keogh/etc.), check A 9b Collectibles (28%) gain (loss) 9c Unrecaptured section 1250 gain C here e 10 Net section 1231 gain (loss) ) Partner's share of profit, loss, and capital (see instructions): Beginning Ending 11 Other inconie (loss) 19 Distributions A Profit 56 LOSS % Capital % 12 Section 179 deduction Check if decrease is due to sale or exchange of partnership 20 Other information A Interest 13 Other deductions A Z" STMT OBI K Partner's share of liabilities: Beginning Ending W-2 wages Nonrecourse $ 5 UBIA Qualified nonrecourse $ $ financing Recourse $ $ Check this box if item k includes liability amounts from lower tier partnerships. 14 Self-employment earnings (loss) ok 13 Other deductions Z" STMT QBI K Partner's share of liabilities: Beginning Ending W-2 wages Nonrecourse $ $ UBIA Qualified nonrecourse $ financing Recourse Check this box if Item K includes liability amounts from lower tier partnerships $ $ 14 Self-employment earnings (loss) $ Partner's capital account analysis: Beginning capital account... Capital contributed during the year.. Current year net income (loss) Other increase (decrease) (attach explanation) $ $ 21 More than one activity for at-risk purposes 22 - More than one activity for passive activity purposes * See attached statement for additional information $ Withdrawals & distributions ...... $ Ending capital account $ M Did the partner contribute property with a built-in gain or loss? Yes No If "Yes,"attach statement, See Instructions, cromoc USD- Dom N Partner's Share of Net Unrecognized Section 704(c) Gain or (Loss) Beginning capital account... $ Ending For Paperwork Reduction Act Notice, see Instructions for Form 1065 www.lrs.gov/Hormoos Cat No. 11394R Nchedule R-1 (Form 1065) 2020 Problem 10-37 (Algorithmic) (LO. 6, 7, 8, 9, 10, 11) Amy and Mitchell share equally (50%) in the profits, losses, and capital of the accrual basis AM Products LLC. The LLC does not need to report financial information to any third parties, so capital accounts are determined using tax rules (rather than GAAP). Amy is a managing member of the LLC (treated as a general partner) and is a U.S. person. At the beginning of the current tax year, Amy's capital account has a balance of $556,000, and the LLC has debts of $361,400 payable to unrelated parties. All debts are recourse to the LLC, but neither of the LLC members has personally guaranteed them. The following information about AM's operations for the current year is obtained from the LLC's records. Operating Income $834,000 W-2 wages 200,000 Depreciation expense 300,000 Interest income 8,340 Long-term capital loss 5,560 Long-term capital gain 16,680 Charitable contribution (cash) Cash distribution to Amy 41,700 Unadjusted basis of partnership property 1,600,000 immediately after acquisition 8,390 Operating income equals revenue less operating expenses (other than expenses listed separately above). Year-end LLC debt payable to unrelated parties is $252,980. Assume that all transactions are reflected in Amy's beginning capital and basis In the same manner. Also assume that all AM Products activities are eligible for the qualified business income deduction a. Calculate Amy's basis in her LLC Interest at the beginning and end of the tax year. Use her capital account as a starting point. LLC interest at the beginning of the year: LLC interest at the end of the years b. What income, gains, losses, and deductions does Amy report on her income tax return? If an amount is zero, enter "0". Ordinary income eBook b. What income, gains, losses, and deductions does Amy report on her income tax return? If an amount is zero, enter "o". Ordinary income Net long-term capital gain Interest Income IIIII Charitable contribution deduction Cash distribution c. Based on the information provided, what other calculations is Amy required to make? Amy may be eligible to deduct up to % of the ordinary income as qualified business income under 5 199A and will make that calculation on her return. This deduction require a cash outflow by Amy or the LLC, and it affect her basis or capital account. As someone treated as a general partner, Amy's distributive share of the LLC's ordinary business income subject to self-employment tax and possibly the additional Medicare tax. Her from the LLC may be subject to the additional tax under $ 1411. d. Prepare Amy's tax basis capital account rolforward from the beginning to the end of the tax year. How does her ending capital account differ from her ending tax basis in the LLC interest as calculated in part (a)? Capital account balance, beginning year Ordinary income Interest income Net long-term capital gain d. Prepare Amy's tax basis capital account rollforward from the beginning to the end of the tax year. How does her ending capital account differ from her ending tax basis in the LLC interest as calculated in part (a)? Capital account balance, beginning year Ordinary income Interest income Net long-term capital gain Less: Charitable contribution Cash distribution to Amy Capital account balance, end of year Amy's capital account differs from her basis only by the amount of her share of LLC e. Using the information from parts (a) to (d), prepare Amy's Schedule K-1 as if you were the preparer of AM Products LLC's tax retum. Provide all information that Amy needs to the extent you can Enter all amounts as positive numbers. Final K-1 651119 Amended K 1 OMB No 1545-0123 Partner's Share of Current Year Income, Deductions, Credits, and Other Items Part III 2020 Schedule K-1 (Form 1065) All work saved e. Using the information from parts () to (d), prepare Amy's Schedule K-1 as if you were the preparer of AM Products LLC's tax return. Provide all information that Amy needs to the extent you can Enter all amounts as positive numbers. Schedule K-1 (Form 1065) 2020 651119 - Final K-1 Amended K-1 OMB No. 1545-0123 Part III Partner's Share of Current Year Income, Deductions, Credits, and other items 1 Ordinary business income 15 Credits (loss) For calendar year 2020. or tax year Department of the Treasury Internal Revenue Service beginning / / 2020 ending 2 Net rental real estate income (loss) Partner's Share of Income, Deductions, Credits, etc. See separate instructions. Part 1 Information About the Partnership A Partnership's employer identification number 3 other net rental income (loss) 16 Foreion transactions 40 Guaranteed payments for services 4b Guaranteed payments for capital 4c Partnership's name, address, city, state, and ZIP code AM Products, LLC IRS Center where partnership filed return Check if this is a publicy traded partnership (PTP) Part II Information about the Partner Partner's SSN or TIN (Do not use TIN of a disregarded entity. See inst.) Total guaranteed payments D 5 Interest inconte E 6a Ordinary dividende ob Qualified dividends Name, address, city, state, and ZIP code for partner entered in E. See instructions Anvy 6c Dividend equivalents 17 Alternative minimum tax (AMT) items See instructions. Amy 6C Dividend equivalents 17 Alternative minimum tax (AMT) items 7 Royalties G General partner or LLC member. Limited partner or other LLC manager member H1 Domestic partner Foreign partner H2 - If the partner is a disregarded entity (DE), enter the partner's: TIN Name 8 Net short-term capital gain (loss) 9a Net. long-term capital gain (loss) 18 Tax-exempt Income and nondeductible expenses 11 What type of entity is this partner? 12 If this partner is a retirement plan (IRA/SEP/Keogh/etc.), check A 9b Collectibles (28%) gain (loss) 9c Unrecaptured section 1250 gain C here e 10 Net section 1231 gain (loss) ) Partner's share of profit, loss, and capital (see instructions): Beginning Ending 11 Other inconie (loss) 19 Distributions A Profit 56 LOSS % Capital % 12 Section 179 deduction Check if decrease is due to sale or exchange of partnership 20 Other information A Interest 13 Other deductions A Z" STMT OBI K Partner's share of liabilities: Beginning Ending W-2 wages Nonrecourse $ 5 UBIA Qualified nonrecourse $ $ financing Recourse $ $ Check this box if item k includes liability amounts from lower tier partnerships. 14 Self-employment earnings (loss) ok 13 Other deductions Z" STMT QBI K Partner's share of liabilities: Beginning Ending W-2 wages Nonrecourse $ $ UBIA Qualified nonrecourse $ financing Recourse Check this box if Item K includes liability amounts from lower tier partnerships $ $ 14 Self-employment earnings (loss) $ Partner's capital account analysis: Beginning capital account... Capital contributed during the year.. Current year net income (loss) Other increase (decrease) (attach explanation) $ $ 21 More than one activity for at-risk purposes 22 - More than one activity for passive activity purposes * See attached statement for additional information $ Withdrawals & distributions ...... $ Ending capital account $ M Did the partner contribute property with a built-in gain or loss? Yes No If "Yes,"attach statement, See Instructions, cromoc USD- Dom N Partner's Share of Net Unrecognized Section 704(c) Gain or (Loss) Beginning capital account... $ Ending For Paperwork Reduction Act Notice, see Instructions for Form 1065 www.lrs.gov/Hormoos Cat No. 11394R Nchedule R-1 (Form 1065) 2020