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Problem 14-28 (LO. 4, 7) Ming and Denise, mother and daughter, operate a local restaurant as an LLC. The MD LLC earned a profit
Problem 14-28 (LO. 4, 7) Ming and Denise, mother and daughter, operate a local restaurant as an LLC. The MD LLC earned a profit of $200,000 in the current year. Denise's equal LLC interest was acquired by gift from Ming. Assume that capital is a material income-producing factor and that Ming manages the day-to-day operations of the restaurant without any help from Denise. Reasonable compensation for Ming's services is $50,000. a. How much of the MD income is allocated to Ming? $ b. What is the maximum amount of LLC income that can be allocated to Denise? c. Assuming that Denise is 15 years old, has no other income, and is claimed as a dependent by Ming, how is Denise's income from the restaurant taxed? The earned income is taxed rates and the remaining income is taxed rates.
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