Please complete Queen Bee Plumbing’s 2020 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.
Taylor Queen and Richard Bee have been life-long friends. After nearly a decade of working for that same company,
Taylor and Richard decided to venture out on their own and form their own plumbing company called Queen Bee
Plumbing. They formed Queen Bee as a limited liability company (LLC). Taylor and Richard each own 50% of the
company.
Information relating to Queen Bee and its owners is as follows:
Name of Company: Queen Bee Plumbing, LLC
Address: 1456 East Buena Vista Blvd.
Los Angeles, CA 90001 (has not changed since inception)
Company formed and started: January 1, 2012
Accounting Method: Accrual
Tax-year end: December 31
Employer Identification Number: 34-7652143
Members’ Information:
Taylor Queen
1515 West Bloomington Street
Los Angeles, CA 90001
SSN- 585-31-4060
Phone: 555-234-8745
Profit/Loss/Capital membership interest is 50%.
Richard Bee
19 East Violet Circle
Los Angeles, CA 90001
SSN: 585-31-6060
Phone: 555-213-0989
Profit/Loss/Capital membership interest is 50%.
Other information:
For any ‘yes’ or ‘no’ questions on Schedule B, assume the answer is ‘no’ unless explicitly stated in the facts below.
• Queen Bee is a domestic limited liability company.
• Taylor and Richard are U.S. citizens and are not related, each owning 50% of the LLC.
• Both Taylor and Richard are managing members.
• All of Queen Bee’s activities constitute a qualified trade or business, and the salaries and wages expense
from the income statement is the same as W-2 wages paid by Queen Bee in 2020.
• The total unadjusted basis for all assets placed in service for the prior 10 years matches the cost of all
assets reported on the balance sheet.
• Taylor is the Partnership Representative.
• Both Taylor and Richard are active in the business and work full-time for Queen Bee.
• Queen Bee does not maintain any inventory.
• • • •
The debt owed to First National Bank is a non-recourse obligation and neither Taylor nor Richard 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 (i.e. qualified nonrecourse debt).
During the year, Taylor and Richard each contributed $20,000 to the capital of Queen Bee.
During the year, Taylor and Richard each received a $60,000 distribution from Queen Bee.
MACRS tax depreciation calculated on the Form 4562 (not required for completion) is $95,000.
Financial Statements:

Queen Bee Plumbing, LLC
Income Statement
For the year ending December 31, 2020
Income:
Service Revenue	$343,500
Consulting Revenue	785,000
Interest Income-First National Bank	1,250
Municipal Bond Interest Income	2,500
Total Income:	$1,132,250
Expenses:
Advertising	$15,000
Automobile Expense	25,000
Depreciation	85,000
Guaranteed payment-Bee	40,000
Guaranteed payment-Queen	60,000
Insurance Expense	75,000
Interest Expense	43,000
Meals	14,000
Office Supplies	3,500
Payroll Taxes	45,000
Penalties & Fines	2,500
Plumbing supplies	15,000
Property Taxes	50,000
Rent	35,000
Salaries and Wages	300,000
Telephone	16,000
Travel (no entertainment or meals)	4,250
Utilities	15,000
Total Expenses:	$843,250
Net Income:	$289,000

Queen Bee Plumbing, LLC
Balance Sheet December 31, 2020
12/31/2019	12/31/2020
Assets:
Cash	30,000	45,000
Accounts Receivable	9,750	6,500
Supplies	5,250	7,500
Tax-exempt Securities	100,000	150,000
Building	400,000	500,000
Less: Acc. Depreciation	(55,000)	(65,000)
Equipment	250,000	325,000
Less: Acc. Depreciation	(150,000)	(225,000)
Land	100,000	100,000
Total Assets:	690,000	844,000
Liabilities and Capital:
Accounts Payable	70,000	45,000
Long Term Note Payable-First National Bank	280,000	250,000
Capital Account-TQ	170,000	274,500
Capital Account-RB	170,000	274,500
Total Liabilities and Capital:	690,000	844,000