Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

QUESTION 11 5 pole Amy and Mitchell share equally in the profits, losses, and capital of the accrual basis AM Products LLC. The LLC does

image text in transcribed
image text in transcribed
QUESTION 11 5 pole Amy and Mitchell share equally in the profits, losses, and capital of the accrual basis AM Products LLC. The LLC does not need to report financial information to any third parties, so capital accounts are determined using tax rules (rather than GAAP). Amy is a managing member of the LLC (treated as a general partner) and is a U.S. person. At the beginning of the current tax year, Amy's capital account has a balance of $604,000, and the LLC has debts of $392,600 payable to unrelated parties. The debts are recourse to the LLC, but neither of the LLC members has personally guaranteed them. Assume that all LLC debt is shared equally between the partners. The following information about AM's operations for the current year is obtained from the LLC's records. Operating income $906,000 W-2 wages 200,000 Depreciation expense 300,000 Interest income 9,060 Long-term capital loss 6,040 Long-term capital gain 18,120 Charitable contribution (cash) 9,110 Cash distribution to Amy 45,300 Unadjusted basis of partnership depreciable property immediately after 1,600,000 acquisition Operating Income equals revenue less operating expenses (other than expenses listed separately above), Click Save and Submit to save and submit. Click Save All Aresters to save all answers Save All Answers 18,120 9,110 Long-term capital gain Charitable contribution (cash) Cash distribution to Amy Unadjusted basis of partnership depredable property immediately after acquisition 45,300 1,600,000 Operating income equals revenue less operating expenses (other than expenses listed separately above). Year-end LLC debt payable to unrelated parties is $274,820. Assume that all transactions are reflected in Amy's beginning capital and basis in the same manner. Also assume that all AM Products activities are eligible for the qualified business income deduction. Calculate Amy's basis in her LLC Interest at the beginning and end of the tax year. Use her capital account as a starting point. LLC Interest at the end of the year: $

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Practical Auditing Techniques For ISO/TS 16949

Authors: Raymond Ness

1st Edition

978-0595273126

More Books

Students also viewed these Accounting questions