Please assist with the following question.

Partnership Tax Return

ACCT 540

Summer 2016

Based on the information provided, you are to complete the appropriate 2014 tax form and any supporting schedules/forms for AAA Fast Plumbing. You do not need to prepare a state tax return. You should complete this tax return by hand using the forms available from the IRS website, www.irs.gov. You can use Adobe (or similar program) to type your responses on the forms. You may not use tax return preparation software to assist in preparing the forms. You may find the form instructions helpful in completing this assignment. Please provide a list of assumptions you make, if any. I will grade your return subject to any reasonable assumptions listed.

You are to work on this assignment with your group. Working on this assignment or discussing it with others is not permitted. Any collaboration outside of your group will be considered a violation of the Academic Honesty Policy, which will result in a grade of zero on this assignment and reporting of the violation to the Dean?s office.

Your assignment is due no later than 11:59 p.m. on August 4^th. Please include your name in the paid preparer?s box at the bottom of the tax return. You do not need to include a cover page.

Instructions:

Please complete AAA Fast Plumbing?s 2014 tax return based upon the facts presented below. If required information is missing, use reasonable assumptions to fill in the gaps. Ignore all AMT calculations and AMT related reporting items.

Michael Rodriguez and Devontae Johnson have been life-long friends. Both Michael and Devontae started to work for the same national plumbing repair company immediately after graduating from technical college. After nearly a decade of working for that same company, Michael and Devontae decided to venture out on their own and form their own plumbing company called AAA Fast Plumbing Repair (AAA). They formed AAA as a limited liability company (LLC). Michael and Devontae each own 50% of the company. The company has been successful primarily based upon reputation and the fact that AAA is available 24 hours a day, seven days a week. Although AAA charges a premium for after normal business hour calls, most of its competitors will not perform services past 9 p.m. and, as a result, AAA finds itself often as one of the only available choices for middle of the night emergencies.

AAA has several employees and, as a result of implementing technology solutions to aid in its call dispatch program, AAA has been able to expand its service area to now include a three-county area instead of just one.

Information relating to AAA and its owners is as follows:

Name of Company: AAA Fast Plumbing Repair, LLC

Address: 1548 West Buena Vista Blvd.

Los Angeles, CA 90001 (has not changed since inception)

Company formed and started: January 1, 2008

Accounting Method: Cash

Tax-year end: December 31

Employer Identification Number: 34-5648184

Members? Information:

Michael Rodriguez

1515 West Bloomington Street

Los Angeles, CA 90001

SSN- 585-31-6060

Profit/Loss/Capital membership interest is 50%.

Devontae Johnson

19 East Violet Circle

Los Angeles, CA 90001

SSN: 397-29-9239

Profit/Loss/Capital membership interest is 50%.

Other information:

AAA is a domestic limited liability companyMichael and Devontae are not related.Michael and Devontae are both U.S. citizens.Both Michael and Devontae are managing members.AAA has not and did not file a Form 8893 or anything similar to it this year or in the past.AAA is not a publicly traded partnership.During the year no debt was cancelled or forgiven in relation to AAA.AAA is not required to file a Form 8918.AAA did not have or control a foreign bank account or have authority over any such financial account.AAA was not the grantor of or a transferor to a foreign trust.AAA has never made a Section 754 election.AAA has never entered into a like-kind exchange or distributed a tenancy-in-common or other undivided interest in partnership property.AAA has never been required to file Form 8858.AAA was required to file Form(s) 1099 related to certain payments it made during the year and those forms were filed on a timely basis.AAA was not required to file any Form(s) 5471 during the year.Michael is the Tax Matters Partner (TMP).Both Michael and Devontae are active in the business and work full-time for AAA.The debt owed to First National Bank is a non-recourse obligation and neither Michael nor Devontae have guaranteed its repayment (see balance sheet below). This debt is not directly tied to any specific asset but is rather a debt secured against all of the assets of the company, with neither Michael nor Devontae personally responsible for its repayment.During the year, Michael and Devontae each contributed $20,000 to the capital of AAAAAA does not maintain any inventory. AAA purchases supplies and has a policy of expensing such purchases as paid for tax and book purposes consistent with existing tax law.AAA uses MACRS depreciation for both tax and book purposes.During the year, Michael and Devontae each received a $75,000 distribution from AAA.During the year, AAA acquired the following assets (all assets were placed in service on the acquisition dates as indicated below): Service vans-new (not Luxury Automobiles) July 1, 2014 $500,000Plumbing machinery/equipment-new July 1, 2014 $250,000

AAA did not claim Section 179 expense for any of the current year asset additions but it did claim available bonus depreciation.

Financial Statements:

Balance Sheet

Assets: 1/01/14 12/31/14

Cash $ 30,000 $ 45,000

Tax-exempt Securities 100,000 100,000

Building 4,000,000 4,000,000

Less: Acc. Depreciation (551,282) (653,842)

Equipment 2,500,000 3,250,000

Less: Acc. Depreciation (1,481,400) (2,231,663)

Land 1,000,000 1,000,000

Total Assets: $5,597,318 $5,509,495

Liabilities and Capital:

Note Payable-First National Bank $4,267,318 $4,046,673

Note Payable-Michael Rodriguez 300,000 300,000

Note Payable-Devontae Johnson 200,000 200,000

Capital Account-MR 415,000 481,411

Capital Account-DJ 415,000 481,411

Total Liabilities and Capital: $5,597,318 $5,509,495

Income Statement for the year ending December 31, 2014

Item Amount

Income:

Service Revenue-Cash $ 344,565

Service Revenue-Credit Cards $1,922,710

Consulting Revenue-Cash $ 50,950

Consulting Revenue-Credit Cards $ 155,005

Interest Income-First National Bank $ 1,540

Municipal Bond Interest Income $ 2,500

Total Income: $2,477,270

Expenses:

Employee Salaries $ 515,735

Guaranteed payment-MR $ 50,000

Guaranteed payment-DJ $ 50,000

Repairs and Maintenance-Trucks $ 113,415

Rent $ 35,000

Payroll Taxes $ 42,260

Licensing Fees $ 1,750

Property Taxes $ 77,000

Interest Expense $ 235,000

Depreciation $ 852,823

Office Supplies $ 3,420

Employee Training $ 5,675

Advertising $ 18,850

Plumbing supplies $ 15,125

Meals and Entertainment (prior to disallowance) $ 13,740

Travel $ 4,210

Gasoline $ 158,675

Utilities $ 24,940

Telephone $ 16,830

Total Expenses: $2,234,448

Net Income: $ 242,822Partnership Tax Return

ACCT 540

Summer 2016

Based on the information provided, you are to complete theappropriate 2014 tax form and any supporting schedules/forms for AAA FastPlumbing. You do not need to prepare a state tax return. You should completethis tax return by hand using the forms available from the IRS website, www.irs.gov. You can use Adobe (or similar program) to type yourresponses on the forms. You may not use tax return preparationsoftware to assist in preparing the forms. You may find the form instructionshelpful in completing this assignment. Please provide a list of assumptions youmake, if any. I will grade your return subject to any reasonable assumptionslisted.

You are to work on this assignment with your group.Working on this assignment or discussing it with others is not permitted. Anycollaboration outside of your group will be considered a violation of theAcademic Honesty Policy, which will result in a grade of zero on thisassignment and reporting of the violation to the Dean?s office.

Your assignment is due no later than 11:59 p.m. on August 4^th. Please includeyour name in the paid preparer?s box at the bottom of the tax return. You donot need to include a cover page.

Instructions:

Please complete AAA Fast Plumbing?s 2014 tax return basedupon the facts presented below. Ifrequired information is missing, use reasonable assumptions to fill in thegaps. Ignore all AMT calculations andAMT related reporting items.

Michael Rodriguez and Devontae Johnson have been life-longfriends. Both Michael and Devontaestarted to work for the same national plumbing repair company immediately aftergraduating from technical college. Afternearly a decade of working for that same company, Michael and Devontae decidedto venture out on their own and form their own plumbing company called AAA FastPlumbing Repair (AAA). They formed AAAas a limited liability company (LLC).Michael and Devontae each own 50% of the company. The company has been successful primarilybased upon reputation and the fact that AAA is available 24 hours a day, sevendays a week. Although AAA charges apremium for after normal business hour calls, most of its competitors will notperform services past 9 p.m. and, as a result, AAA finds itself often as one ofthe only available choices for middle of the night emergencies.

AAA has several employees and, as a result of implementingtechnology solutions to aid in its call dispatch program, AAA has been able toexpand its service area to now include a three-county area instead of just one.

Information relating to AAA and its owners is as follows:

Name of Company: AAA Fast PlumbingRepair, LLC

Address: 1548 West Buena VistaBlvd.

Los Angeles, CA 90001(has not changed since inception)

Company formed and started: January1, 2008

Accounting Method: Cash

Tax-year end: December31

Employer Identification Number: 34-5648184

Members? Information:

Michael Rodriguez

1515 West Bloomington Street

Los Angeles, CA 90001

SSN- 585-31-6060

Profit/Loss/Capital membership interest is 50%.

Devontae Johnson

19 East Violet Circle

Los Angeles, CA 90001

SSN: 397-29-9239

Profit/Loss/Capital membership interest is 50%.

Other information:

AAA is a domestic limited liability company

Michael and Devontae are not related.

Michael and Devontae are both U.S. citizens.

Both Michael and Devontae are managing members.

AAA has not and did not file a Form 8893 or anything similarto it this year or in the past.

AAA is not a publicly traded partnership.

During the year no debt was cancelled or forgiven inrelation to AAA.

AAA is not required to file a Form 8918.

AAA did not have or control a foreign bank account or haveauthority over any such financial account.

AAA was not the grantor of or a transferor to a foreigntrust.

AAA has never made a Section 754 election.

AAA has never entered into a like-kind exchange ordistributed a tenancy-in-common or other undivided interest in partnershipproperty.

AAA has never been required to file Form 8858.

AAA was required to file Form(s) 1099 related to certainpayments it made during the year and those forms were filed on a timely basis.

AAA was not required to file any Form(s) 5471 during theyear.

Michael is the Tax Matters Partner (TMP).

Both Michael and Devontae are active in the business andwork full-time for AAA.

The debt owed to First National Bank is a non-recourseobligation and neither Michael nor Devontae have guaranteed its repayment (seebalance sheet below). This debt is notdirectly tied to any specific asset but is rather a debt secured against all ofthe assets of the company, with neither Michael nor Devontae personallyresponsible for its repayment.

During the year, Michael and Devontae each contributed$20,000 to the capital of AAA

AAA does not maintain any inventory. AAA purchases supplies and has a policy ofexpensing such purchases as paid for tax and book purposes consistent withexisting tax law.

AAA uses MACRS depreciation for both tax and book purposes.

During the year, Michael and Devontae each received a$75,000 distribution from AAA.

During the year, AAA acquired the following assets (allassets were placed in service on the acquisition dates as indicated below):

o Service vans-new (not Luxury Automobiles) July 1, 2014 $500,000

o Plumbing machinery/equipment-new July 1, 2014 $250,000

AAA did not claim Section 179 expense for any of the currentyear asset additions but it did claim available bonus depreciation.

Financial Statements:

Balance Sheet

Assets: 1/01/14 12/31/14

Cash $ 30,000 $ 45,000

Tax-exempt Securities 100,000 100,000

Building 4,000,000 4,000,000

Less: Acc. Depreciation (551,282) (653,842)

Equipment 2,500,000 3,250,000

Less: Acc. Depreciation (1,481,400) (2,231,663)

Land 1,000,000 1,000,000

Total Assets: $5,597,318 $5,509,495

Liabilities and Capital:

Note Payable-First National Bank $4,267,318 $4,046,673

Note Payable-Michael Rodriguez 300,000 300,000

Note Payable-Devontae Johnson 200,000 200,000

Capital Account-MR 415,000 481,411

Capital Account-DJ 415,000 481,411

Total Liabilities and Capital: $5,597,318 $5,509,495

Income Statement for the year ending December 31, 2014

Item Amount

Income:

Service Revenue-Cash $ 344,565

Service Revenue-Credit Cards $1,922,710

Consulting Revenue-Cash $ 50,950

Consulting Revenue-Credit Cards $155,005

Interest Income-First National Bank $1,540

Municipal Bond Interest Income $ 2,500

Total Income: $2,477,270

Expenses:

Employee Salaries $ 515,735

Guaranteed payment-MR $ 50,000

Guaranteed payment-DJ $ 50,000

Repairs and Maintenance-Trucks $113,415

Rent $ 35,000

Payroll Taxes $ 42,260

Licensing Fees $ 1,750

Property Taxes $ 77,000

Interest Expense $ 235,000

Depreciation $ 852,823

Office Supplies $ 3,420

Employee Training $ 5,675

Advertising $ 18,850

Plumbing supplies $ 15,125

Meals and Entertainment (prior to disallowance) $13,740

Travel $ 4,210

Gasoline $ 158,675

Utilities $ 24,940

Telephone $ 16,830

Total Expenses: $2,234,448

Net Income: $ 242,822

Tax Return Problem 9: Partnership Instructions: Please complete AAA Rescue Rooter's 2014 tax return based upon the facts presented below. If required information is missing, use reasonable assumptions to fill in the gaps. Ignore all AMT calculations and AMT related reporting items. Michael Rodriguez and Devontae Johnson have been life-long friends. Both Michael and Devontae started to work for the same national plumbing repair company immediately after graduating from technical college. After nearly a decade of working for that same company, Michael and Devontae decided to venture out on their own and form their own plumbing company called AAA Rescue Rooter Repair (AAA). They formed AAA as a limited liability company (LLC). Michael and Devontae each own 50% of the company. The company has been successful primarily based upon reputation and the fact that AAA is available 24 hours a day, seven days a week. Although AAA charges a premium for after normal business hour calls, most of its competitors will not perform services past 9 p.m. and, as a result, AAA finds itself often as one of the only available choices for middle of the night emergencies. AAA has several employees and, as a result of implementing technology solutions to aid in its call dispatch program, AAA has been able to expand its service area to now include a three-county area instead of just one. Information relating to AAA and its owners is as follows: Name of Company: Address: Company formed and started: Accounting Method: Tax-year end: Employer Identification Number: AAA Rescue Rooter Repair, LLC 1456 East Buena Vista Blvd. Los Angeles, CA 90001 (has not changed since inception) January 1, 2008 Cash December 31 34-1234567 Members' Information: Michael Rodriguez 1515 West Bloomington Street Los Angeles, CA 90001 SSN- 585-31-6060 Profit/Loss/Capital membership interest is 50%. Devontae Johnson 19 East Violet Circle Los Angeles, CA 90001 SSN: 397-29-9239 Profit/Loss/Capital membership interest is 50%. Other information: AAA is a domestic limited liability company Michael and Devontae are not related. Michael and Devontae are both U.S. citizens. Both Michael and Devontae are managing members. AAA has not and did not file a Form 8893 or anything similar to it this year or in the past. AAA is not a publicly traded partnership. During the year no debt was cancelled or forgiven in relation to AAA. AAA is not required to file a Form 8918. AAA did not have or control a foreign bank account or have authority over any such financial account. AAA was not the grantor of or a transferor to a foreign trust. AAA has never made a Section 754 election. AAA has never entered into a like-kind exchange or distributed a tenancy-in-common or other undivided interest in partnership property. AAA has never been required to file Form 8858. AAA was required to file Form(s) 1099 related to certain payments it made during the year and those forms were filed on a timely basis. AAA was not required to file any Form(s) 5471 during the year. Michael is the Tax Matters Partner (TMP). Both Michael and Devontae are active in the business and work full-time for AAA. The debt owed to First National Bank is a non-recourse obligation and neither Michael nor Devontae have guaranteed its repayment (see balance sheet below). This debt is not directly tied to any specific asset but is rather a debt secured against all of the assets of the company, with neither Michael nor Devontae personally responsible for its repayment. During the year, Michael and Devontae each contributed $20,000 to the capital of AAA AAA does not maintain any inventory. AAA purchases supplies and has a policy of expensing such purchases as paid for tax and book purposes consistent with existing tax law. AAA uses MACRS depreciation for both tax and book purposes. During the year, Michael and Devontae each received a $75,000 distribution from AAA. During the year, AAA acquired the following assets (all assets were placed in service on the acquisition dates as indicated below): o Service vans-new (not Luxury Automobiles) July 1, 2014 $500,000 o Plumbing machinery/equipment-new July 1, 2014 $250,000 AAA did not claim Section 179 expense for any of the current year asset additions but it did claim available bonus depreciation. Financial Statements: Balance Sheet Assets: 1/01/14 12/31/14 Cash Tax-exempt Securities Building Less: Acc. Depreciation Equipment Less: Acc. Depreciation Land $ 30,000 100,000 4,000,000 (551,282) 2,500,000 (1,481,400) 1,000,000 $ 45,000 100,000 4,000,000 (653,842) 3,250,000 (2,231,663) 1,000,000 Total Assets: $5,597,318 $5,509,495 $4,267,318 300,000 200,000 $4,046,673 300,000 200,000 415,000 415,000 481,411 481,411 $5,597,318 $5,509,495 Liabilities and Capital: Note Payable-First National Bank Note Payable-Michael Rodriguez Note Payable-Devontae Johnson Capital Account-MR Capital Account-DJ Total Liabilities and Capital: Income Statement for the year ending December 31, 2014 Item Amount Income: Service Revenue-Cash Service Revenue-Credit Cards Consulting Revenue-Cash Consulting Revenue-Credit Cards $ 343,565 $1,922,710 $ 50,950 $ 155,005 Interest Income-First National Bank Municipal Bond Interest Income $ $ Total Income: $2,476,270 1,540 2,500 Expenses: Employee Salaries Guaranteed payment-MR Guaranteed payment-DJ $ Repairs and Maintenance-Trucks Rent Payroll Taxes Licensing Fees Property Taxes Interest Expense Depreciation Office Supplies Employee Training Advertising Plumbing supplies Meals and Entertainment (prior to disallowance) Travel Gasoline Utilities Telephone $ 515,735 $ 50,000 50,000 $ 113,415 $ 35,000 $ 41,260 $ 1,750 $ 77,000 $ 235,000 $ 852,823 $ 3,420 $ 5,675 $ 18,850 $ 15,125 $ 13,740 $ 4,210 $ 158,675 $ 24,940 $ 16,830 Total Expenses: $2,233,448 Net Income: $ 242,822