Project $2-$ Partnership Tax Return

Facts:

The Aspen Ridge limited partnership was formed on April $1,2010,$ by Mark Sullivan, its general

partner, and two other limited partners when they each contributed an equal amount of cash to

start the new enterprise. Aspen Ridge, LP is an outdoor equipment retailer selling camping,

fishing, skiing, and other outdoor gear to the general public. Mark has a $33\mathrm{.}33$ percent profits,

loss, and capital interest and the limited partners hold the remaining $66\mathrm{.}66$ percent of the profits,

loss, and capital interests. Their profits, loss, and capital interests have remained unchanged

since the partnership was formed. Mark is actively involved in managing the business while the

limited partners are only investors, and Mark receives an annual guaranteed distribution of

$$35,000$ for his services managing the business.

$$ Aspen Ridge, LP is located at $1065$ North $365$ South, Ogden, Utah $84401.$

$$ The employer identification number for Aspen Ridge is $85-8976654.$

$$ Aspen Ridge uses the accrual method of accounting and has a calendar year$-$end.

$$ Mark$$s address is $543$ Wander Lane, Holladay, Utah $84503,$ and his Social Security

number is $445-27-3584.$ His phone is $801-555-5555.$ Mark is designated as the

Partnership Representative in the partnership agreement.

Other Notes:

$1.$ Aspen Ridge has total assets of $$1,249,700$ and total liabilities of $$447,067$ at the

beginning of the year, and total assets of $$1,494,600$ and total liabilities of $$618,867$ at

the end of the year.

$2.$ Partnership liabilities consist of accounts payable, and Mark, as general partner, is legally

responsible for paying these liabilities if the partnership does not.

$3.$ Two years ago, Aspen Ridge purchased an original Ansel Adams outdoor landscape

photograph $($a collectible$)$ with the intent to display it permanently in the retail store. This

year, however, the photograph was sold to a local ski lodge where it now hangs on the

wall. The $$34,000$ recognized gain from the sale is reflected in the income statement

above.

$4.$ For tax purposes, Aspen Ridge has consistently elected out of bonus depreciation and has

elected instead under $179$ to expense any furniture or fixtures placed in service every

year since it was formed. As a result, it does not have a tax basis in any of its depreciable

assets. This year, Aspen Ridge expensed $$17,300$ of signs and display cases for tax

purposes.

$5.$ On November $20,$ Aspen Ridge distributed $$180,000($$$60,000$ per partner$)$ to the

partners.

$2$

$6.$ Miscellaneous expenses reported on the income statement include a $$900$ fine for

violating a local signage ordinance.

$7.$ All three partners$$ capital accounts each had a tax$-$basis opening balance of $$279,511.$

$8.$ Assume that Aspen Ridge did not make any payments that would require it to file

Form$($s$)1099.$

$9.$ The following is Aspen Ridge$$s $2022$ income statement:

$\backslash$table$[[$Aspen Ridge Income Statement$],[$Sales$,$$$965,{500}_{?}$