please use 2020 form 1065 and schedule D. see the requirements for the assignment.

4. FPI's compen comes from publicly traded stor . Tax Return Problems - formerly Appendix C Partnership Tax Return Problem 2 Required: Using the information provided below, complete Arlington Building Supply's (ABS) 2020 Form 1065 and Schedule D. Also complete Jerry Johnson and Steve Stillwell's Schedule K-1 Form 4562 for depreciation is not required. Use the amount of tax depreciation and $179 expense provided in the income statement and the information in item #14 below to complete the appropriate lines on the first page and on Schedule K of Form 1065. Form 4797 for the sale of trade or business property is not required. Use the amount of gain and loss from the sale of the truck and forklifts in the income statement and the information provided in items 4 and 5 below to complete the appropriate lines on the first page and on Schedule K of Form 1065 If any information is missing, use reasonable assumptions to fill in the gaps. Assume no payments were made that would require Arlington Building Supply to file Form(s) 1099. The forms, schedules, and instructions can be found at the IRS website (www.irs.gov). The instructions can be helpful in completing the forms. . . Facts: . On January 1, 2009, two enterprising men in the community, Jerry Johnson and Steve "Swiss Stillwell, anticipated a boom in the local construction industry. They decided to sell their small businesses and pool their resources as general partners in establishing a retail outlet for lumber and other building materials, including a complete line of specialty hardware for prefab tree houses. Their general partnership was officially formed under the name of Arlington Building Supply and soon became a thriving business ABS is located at 2174 Progress Ave., Arlington, Illinois 64888 ABS's Employer Identification Number is 91-3697984. ABS's business activity is retail construction. Its business activity code is 444190. Both general partners are active in the management of ABS. o Jerry Johnson's Social Security number is 500-23-4976. His address is 31 W. Oak Drive, Arlington, Illinois 64888 Steve Stillwell's Social Security number is 374-68-3842. His address is 947 E. Linder Street, Arlington, Illinois 64888. . . o o Steve Stillwell is designated in the partnership agreement as the Partnership Representative for tax purposes. ABS uses the accrual method of accounting and has a calendar year-end. The following is ABS's 2020 income statement ABS In Statement For rear ending December 31, 2020 Sales o con 5410,000 Sect 20000 5390,000 Cost or goodies Gross alas 5240.000 Opching expenses Salaries and including partes granted payments) 579.000 Property bes 1.600 Payroll taxes 2.450 Depreciation and 5179 perse 40,062 Advertising 2.000 Bad debt experie 3,850 Office expense 1.800 Repairs 2.150 Miscellaneous 450 Fire insurance 4,850 138212 Net operating income S101.788 Other income Gain on sale of securities $1,350 Gain on sale of truck 16399 Dividend income 693 Interest income 4.260 22.704 SI24.492 Other doductions Interest on mortgage $ 5,400 Interest on notes payable 2.250 Cash charitable contributions 5.000 Life insurance premiums 3,000 Loss on sale of forklifts 466 16.116 Net income S108,376 Notes: 1. The partnership maintains its books according to the $704(b) regulations. Under this method of accounting, all book and tax numbers are the same except for life insurance premiums and tax-exempt interest. 2. The partners' percentage ownership of original contributed capital is 30 percent for Johnson and 70 percent for Stillwell. They agree that profits and losses will be shared according to this same ratio and that the partner's individual capital accounts may deviate periodically from their profit sharing ratios. 3. For their services to the company, the partners will receive the following annual guaranteed payments Johnson $28.000 Stilwell 521.000 4. Johnson is expected to devote all his time to the business, while still well will devote approximately 75 percent of his 5. Two forklifts were sold in September 2020. The old lifts were purchased now four years ago. Two new forklifts were purchased on September 1, 2020, for $32,000 and the partnership intends to immediately expense them under 5179 (see depreciation and $179 expense in the income statement above). 6. The track sold this year was purchased several years ago. Of the total gain from the sale of the truck, S16,099 should be recaptured as ordinary income under IRC $1245 7. The partnership uses currently allowable tax depreciation methods for both regular tax and book purposes and has adopted a policy of clecting not to claim bonus Page C- 23depreciation. Assume alternative minimum tax depreciation equals regular tax depreciation 8. The partners decided to invest in a small tract of land with the intention of selling it about a year later at a substantial profit. On January 1, 2020, they executed a $50,000 note with a the bank to obtain the $70,000 cash purchase price. Interest on the note is payable yearly, and the principal is due in 18 months. The first interest payment of $2,250 was made on December 30, 2020 (see interest on notes payable in income statement above). 9. The note payable to the bank as well as the accounts payable are treated by the partnership as recourse debt. Assume the total recourse debt at the beginning of the year is allocated $9.225 to Jerry and $36,275 to Steve and the total recourse debt at the end of the year is allocated $28,776 to Jerry and $70,224 to Steve. 10. Some years after the partnership was formed, a mortgage of $112,500 was obtained on the land and warehouse from Commerce State Bank. Principal payments of $4,500 must be paid each December 31, along with 8 percent interest on the outstanding balance (see interest on mortgage in the income statement above). The holder of the note agreed therein to look only to the land and warehouse for his security in the event of default. Because this mortgage is nonrecourse debt, it should be allocated among the partners according to their profit sharing ratios. 11. The partnership values its inventory at lower of cost or market and uses the FIFO inventory method. Assume the UNICAP rules of $263A do not apply to ABS. 12. During the year, the partnership bought 300 shares of ABC, Ltd., for $6,100 on February 8, 2020. All the shares were sold for $6,650 on April 2, 2020. ABS received a Form 1099-B indicating that the basis of the ABC shares was reported to the IRS. 13. Two hundred shares of XYZ Corporation were sold for 510,600 on September 13, 2020 The stock was purchased on December 1, 2012 and is not eligible for the 28 percent capital gains rate ABS received a Form 1099-indicating that the basis of the XYZ shares was 89,800 14. The following dividends were received XYZ (qualified) 5400 ABC, Ltd. (not qualified) 295 Total S695 15. The partnership received interest income from the following sources: Interest on Illinois municipal bonds $3,200 Interest on savings Interest on accounts receivable Total $4,260 560 500 16. The partnership donated $5,000 in cash to the Red Cross 17. Life insurance policies on the lives of Johnson and Stillwell were purchased in the prior year. The partnership will pay all the premiums and is the beneficiary of the policy. The premiums for the current year were $3,000 (see income statement above), and no cash surrender value exists for the first or second year of the policy. 18. The partners withdrew the following cash amounts from the partnership during the year (in addition to their guaranteed payments): Johnson $20,000 Stillwell 35,000 The following are ABS's balance sheets as of January 1, 2020, and December 31, 2020. 12/31/2020 570,467 76.000 60.000 50.000 ABS Balance Sheet December 31,2020 12/31/2019 Assets Cash 543,042 Accounts receivable 57.000 Inventories 50.000 Investment m municipal 30,000 bonds Investment in XYZ 50.000 common stock Truck $ 16,500 Less accumulated 13649 depreciation 2.851 Machinery and equipment $ 50,000 Less accumulated 34376 depreciation 40,200 $ 66,000 58.697 7303 15.624 $120.000 $120,000 39.875 36.798 Building Less accumulated depreciation 83.202 20.000 $371712 80,125 90.000 5474.095 Land Total Assets Liabilities and Capital Accounts payable Notes payable Mortgage payable Capital: Jerry Johnson Steve Stillwell Total Liabilities & Capital $ 45,500 0 67,500 82,040 176.679 $321 719 549,000 50,000 63.000 94,553 217542 $474,093 4. FPI's compen comes from publicly traded stor . Tax Return Problems - formerly Appendix C Partnership Tax Return Problem 2 Required: Using the information provided below, complete Arlington Building Supply's (ABS) 2020 Form 1065 and Schedule D. Also complete Jerry Johnson and Steve Stillwell's Schedule K-1 Form 4562 for depreciation is not required. Use the amount of tax depreciation and $179 expense provided in the income statement and the information in item #14 below to complete the appropriate lines on the first page and on Schedule K of Form 1065. Form 4797 for the sale of trade or business property is not required. Use the amount of gain and loss from the sale of the truck and forklifts in the income statement and the information provided in items 4 and 5 below to complete the appropriate lines on the first page and on Schedule K of Form 1065 If any information is missing, use reasonable assumptions to fill in the gaps. Assume no payments were made that would require Arlington Building Supply to file Form(s) 1099. The forms, schedules, and instructions can be found at the IRS website (www.irs.gov). The instructions can be helpful in completing the forms. . . Facts: . On January 1, 2009, two enterprising men in the community, Jerry Johnson and Steve "Swiss Stillwell, anticipated a boom in the local construction industry. They decided to sell their small businesses and pool their resources as general partners in establishing a retail outlet for lumber and other building materials, including a complete line of specialty hardware for prefab tree houses. Their general partnership was officially formed under the name of Arlington Building Supply and soon became a thriving business ABS is located at 2174 Progress Ave., Arlington, Illinois 64888 ABS's Employer Identification Number is 91-3697984. ABS's business activity is retail construction. Its business activity code is 444190. Both general partners are active in the management of ABS. o Jerry Johnson's Social Security number is 500-23-4976. His address is 31 W. Oak Drive, Arlington, Illinois 64888 Steve Stillwell's Social Security number is 374-68-3842. His address is 947 E. Linder Street, Arlington, Illinois 64888. . . o o Steve Stillwell is designated in the partnership agreement as the Partnership Representative for tax purposes. ABS uses the accrual method of accounting and has a calendar year-end. The following is ABS's 2020 income statement ABS In Statement For rear ending December 31, 2020 Sales o con 5410,000 Sect 20000 5390,000 Cost or goodies Gross alas 5240.000 Opching expenses Salaries and including partes granted payments) 579.000 Property bes 1.600 Payroll taxes 2.450 Depreciation and 5179 perse 40,062 Advertising 2.000 Bad debt experie 3,850 Office expense 1.800 Repairs 2.150 Miscellaneous 450 Fire insurance 4,850 138212 Net operating income S101.788 Other income Gain on sale of securities $1,350 Gain on sale of truck 16399 Dividend income 693 Interest income 4.260 22.704 SI24.492 Other doductions Interest on mortgage $ 5,400 Interest on notes payable 2.250 Cash charitable contributions 5.000 Life insurance premiums 3,000 Loss on sale of forklifts 466 16.116 Net income S108,376 Notes: 1. The partnership maintains its books according to the $704(b) regulations. Under this method of accounting, all book and tax numbers are the same except for life insurance premiums and tax-exempt interest. 2. The partners' percentage ownership of original contributed capital is 30 percent for Johnson and 70 percent for Stillwell. They agree that profits and losses will be shared according to this same ratio and that the partner's individual capital accounts may deviate periodically from their profit sharing ratios. 3. For their services to the company, the partners will receive the following annual guaranteed payments Johnson $28.000 Stilwell 521.000 4. Johnson is expected to devote all his time to the business, while still well will devote approximately 75 percent of his 5. Two forklifts were sold in September 2020. The old lifts were purchased now four years ago. Two new forklifts were purchased on September 1, 2020, for $32,000 and the partnership intends to immediately expense them under 5179 (see depreciation and $179 expense in the income statement above). 6. The track sold this year was purchased several years ago. Of the total gain from the sale of the truck, S16,099 should be recaptured as ordinary income under IRC $1245 7. The partnership uses currently allowable tax depreciation methods for both regular tax and book purposes and has adopted a policy of clecting not to claim bonus Page C- 23depreciation. Assume alternative minimum tax depreciation equals regular tax depreciation 8. The partners decided to invest in a small tract of land with the intention of selling it about a year later at a substantial profit. On January 1, 2020, they executed a $50,000 note with a the bank to obtain the $70,000 cash purchase price. Interest on the note is payable yearly, and the principal is due in 18 months. The first interest payment of $2,250 was made on December 30, 2020 (see interest on notes payable in income statement above). 9. The note payable to the bank as well as the accounts payable are treated by the partnership as recourse debt. Assume the total recourse debt at the beginning of the year is allocated $9.225 to Jerry and $36,275 to Steve and the total recourse debt at the end of the year is allocated $28,776 to Jerry and $70,224 to Steve. 10. Some years after the partnership was formed, a mortgage of $112,500 was obtained on the land and warehouse from Commerce State Bank. Principal payments of $4,500 must be paid each December 31, along with 8 percent interest on the outstanding balance (see interest on mortgage in the income statement above). The holder of the note agreed therein to look only to the land and warehouse for his security in the event of default. Because this mortgage is nonrecourse debt, it should be allocated among the partners according to their profit sharing ratios. 11. The partnership values its inventory at lower of cost or market and uses the FIFO inventory method. Assume the UNICAP rules of $263A do not apply to ABS. 12. During the year, the partnership bought 300 shares of ABC, Ltd., for $6,100 on February 8, 2020. All the shares were sold for $6,650 on April 2, 2020. ABS received a Form 1099-B indicating that the basis of the ABC shares was reported to the IRS. 13. Two hundred shares of XYZ Corporation were sold for 510,600 on September 13, 2020 The stock was purchased on December 1, 2012 and is not eligible for the 28 percent capital gains rate ABS received a Form 1099-indicating that the basis of the XYZ shares was 89,800 14. The following dividends were received XYZ (qualified) 5400 ABC, Ltd. (not qualified) 295 Total S695 15. The partnership received interest income from the following sources: Interest on Illinois municipal bonds $3,200 Interest on savings Interest on accounts receivable Total $4,260 560 500 16. The partnership donated $5,000 in cash to the Red Cross 17. Life insurance policies on the lives of Johnson and Stillwell were purchased in the prior year. The partnership will pay all the premiums and is the beneficiary of the policy. The premiums for the current year were $3,000 (see income statement above), and no cash surrender value exists for the first or second year of the policy. 18. The partners withdrew the following cash amounts from the partnership during the year (in addition to their guaranteed payments): Johnson $20,000 Stillwell 35,000 The following are ABS's balance sheets as of January 1, 2020, and December 31, 2020. 12/31/2020 570,467 76.000 60.000 50.000 ABS Balance Sheet December 31,2020 12/31/2019 Assets Cash 543,042 Accounts receivable 57.000 Inventories 50.000 Investment m municipal 30,000 bonds Investment in XYZ 50.000 common stock Truck $ 16,500 Less accumulated 13649 depreciation 2.851 Machinery and equipment $ 50,000 Less accumulated 34376 depreciation 40,200 $ 66,000 58.697 7303 15.624 $120.000 $120,000 39.875 36.798 Building Less accumulated depreciation 83.202 20.000 $371712 80,125 90.000 5474.095 Land Total Assets Liabilities and Capital Accounts payable Notes payable Mortgage payable Capital: Jerry Johnson Steve Stillwell Total Liabilities & Capital $ 45,500 0 67,500 82,040 176.679 $321 719 549,000 50,000 63.000 94,553 217542 $474,093