Required information [The following information applies to the questions displayed below.] The TimpRiders LP has operated a motorcycle dealership for a number of years. Lance is the limited partner, Francesca is the general partner, and they share capital and profits equally. Francesca works full time managing the partnership. Both the partnership and the partners report on a calendar-year basis. At the start of the current year, Lance and Francesca had bases of $12,300 and $5,300, respectively, and the partnership did not have any liabilities. During the current year, the partnership reported the following results from operations: Net sales Cost of goods sold Operating expenses Short-term capital loss Tax-exempt interest $1231 gain $ 715,000 535,000 200,000 7,000 7,000 11,000 On the last day of the year, the partnership distributed $5,300 each to Lance and Francesca. d. Using the information provided, prepare TimpRiders' page 1 and Schedule K to be included with its Form 1065 for the current year. Also, prepare a Schedule K-1 for Lance and Francesca. (Use 2021 tax rules regardless of year on tax form. Losses should be entered as negative numbers and input all other values as positive numbers) Form 1065 Page 1. OMB No. 1545-0123 Form 1065 Department of the Treasury Internal Revenue Service A Principal business activity 2020 U.S. Return of Partnership Income For calendar year 2020, or tax year beginning 2020, ending 20 Go to www.irs.gov/Form 1065 for instructions and the latest information. Name of Partnership TimpRiders, LP Type or Print Number, street, and room or suite no. If a P.O. box, see instructions. , D Employer identification number B Principal product or service E Date business started C Business code number City or town, state or province, country, and ZIP or foreign postal code F Total assets (see instructions) G Check applicable boxes: (1) Initial Return (2) Final Return (3) Name Change (4) Address Change (5) Amended Return H Check accounting method: (1) Cash ) (2) Accrual (3) Other (specify) 1 Number of Schedules K-1. Attach one for each person who was a partner at any time during the tax year . 2 J Check if Schedules C and M-3 are attached K Check if partnership: (1) Aggregated activities for section 465 at-risk purposes (2 (2) Grouped activities for section 469 passive activity purposes Caution: Include only trade or business income and expenses on lines 1a through 22 below. See instructions for more information. 1a Gross receipts or sales 1a 715,000 b Returns and allowances 1b c Balance Subtract line 1b from line 1a 1C 715,000 2 Cost of goods sold (attach Form 1125-A) 2 535,000 3 Gross profit. Subtract line 2 from line 3 180,000 Income 4 Ordinary income (loss) from other partnerships, estates, and trusts (attach statement) 4 5 Net farm profit (loss) (attach Schedule F (Form 1040 or 1040-SR)) 5 6 Net gain (loss) from Form 4797, Part II, line 17 (attach Form 4797) 6 7 Other income (loss) (attach statement) 7 8 Total income (loss). Combine lines 3 through 7 8 180.000 9 Salaries and wages (other than to partners) (less employment credits) 9 10 Guaranteed payments to partners 10 11 Repairs and maintenance 11 12 Bad debts 12 13 Rent 13 Deductions 14 Taxes and licenses 14 (see the 15 Interest (see instructions) 15 instructions 16a Depreciation (if required, attach Form 4562) 16a for b Less depreciation reported on Form 1125-A and elsewhere on return 16b 16c 8 Salaries and wages (other than to partners) (less employment credits) 9 10 Guaranteed payments to partners 10 11 Repairs and maintenance 11 12 Bad debts 12 13 Rent 13 Deductions 14 Taxes and licenses 14 (see the 15 Interest (see instructions) 15 instructions 16a Depreciation (if required, attach Form 4562) 16a for b Less depreciation reported on Form 1125-A and elsewhere on return 16b 16c limitations) 17 Depletion (Do not deduct oil and gas depletion.) 17 18 Retirement plans, etc 18 19 Employee benefit programs 19 20 Other deductions (attach statement) 20 21 Total deductions. Add the amounts shown in the far right column for lines 9 through 20 21 0 22 Ordinary business income (loss). Subtract line 21 from line 8 22 180.000 23 Interest due under the look back methodcompleted long-term contracts (attach Form 8697) 23 24 Interest due under the look-back methodincome forecast method (attach Form 8866) 24 25 BBA AAR imputed underpayment (see instructions) 25 Tax and 26 Other taxes (see instructions) 26 Payment 27 Total balance due. Add lines 23 through 26 . 27 28 Payment (see instructions) 28 29 Amount owed. If line 28 is smaller than line 27, enter amount owed 29 30 Overpayment. If line 28 is larger than line 27, enter overpayment 30 Under penalties of perjury, I declare that I have examined this return, including accompanying schedules and statements, and to the best of my knowledge and belief, it is true, correct, and complete. Declaration of preparer (other than partner or limited liability company member) is based on all information of which preparer has any knowledge. Sign May the IRS discuss this return with the Here preparer shown below? See instructions. Signature of partner or limited liability company member Date Yes No Print/Type preparer's name Preparer's signature Date Check if self-employed PTIN Paid Preparer Firm's name Firm's EIN Use Only Firm's address Phone no For Paperwork Reduction Act Notice, see separate instructions. Cat. No. 11390Z Form 1065 (2020) THIS FORM IS A SIMULATION OF AN OFFICIAL U.S. TAX FORM. IT IS NOT THE OFFICIAL FORM ITSELF. DO NOT USE THIS FORM FOR TAX FILINGS OR FOR ANY PURPOSE OTHER THAN EDUCATIONAL. 2021 McGraw-Hill Education. Form 1065 Schedule K. Page 4 Total amount 1 180,000 2 3a 3b 3c 0 4 4c 5 6b 6c 7 7 8 9a Form 1065 (2020) Schedule K Partners' Distributive Share Items Ordinary business income (loss) (page 1, line 22) 2 Net rental real estate income (loss) (attach Form 8825) 3a Other gross rental income (loss) b Expenses from other rental activities (attach statement) c Other net rental income (loss). Subtract line 3b from line 3a 4 Guaranteed payments: : a Services 4a b Capital 4b C Total. Add lines 4a and 4b 5 Interest income Income (Loss) 6 Dividends and dividend equivalents: a Ordinary dividends b b Qualified dividends C c Dividend equivalents 7 Royalties 8 Net short-term capital gain (loss) (attach Schedule D (Form 1065)) 9a Net long-term capital gain (loss) (attach Schedule D (Form 1065)) b Collectibles (28%) gain (loss) c Unrecaptured section 1250 gain (attach statement) 10 Net section 1231 gain (loss) (attach Form 4797) 11 Other income (loss) (see instructions) Type - 12 Section 179 deduction (attach Form 4562) 13a Contributions Deductions b Investment interest expense C e(2 Section 59(e) (2) expenditures: (1) Type d ) Other deductions (see instructions) Type 14a Net earnings (loss) from self-employment Self-Employment Gross farming or fishing income C Gross nonfarm income 15a Low-income housing credit (section 4205)) b Low-income housing credit (other) Credits Qualified rehabilitation expenditures (rental real estate) (attach Form 3468, if applicable) d Other rental real estate credits (see instructions) Type - e Other rental credits (see instructions) Type - If Other credits (see instructions) Type - 16a Name of country or U.S. possession b b Gross income from all sources 9b 9c 10 11 12 13a 13b (2) Amount 13c(2) 13d 14a 14b 14c 15a 15b C 15c 150 15e 15f 16b 16b 16c 16f 16a Name of country or U.S. possession b Gross income from all sources Gross income sourced at partner level Foreign gross income sourced at partnership level d Reserved for future use e Foreign branch category |f Passive category g General category Deductions allocated and apportioned at partner level i Interest expense i Other Deductions allocated and apportioned at partnership level to foreign source income k Reserved for future use I Foreign branch category Other (attach statement). Foreign Transactions 16h o Other (attach statement) m 16k Accrued 161 16m 17a Alternative Minimum Tax (AMT) Items Passive category n General category Total foreign taxes (check one): Paid 9 Reduction in taxes available for credit (attach statement) r Other foreign tax information (attach statement) 17a Post-1986 depreciation adjustment b Adjusted gain or loss Depletion (other than oil and gas) d Oil, gas, and geothermal propertiesgross income Oil, gas, and geothermal propertiesdeductions f Other AMT items (attach statement) 18a Tax-exempt interest income b Other tax-exempt income C Nondeductible expenses 19a Distributions of cash and marketable securities b Distributions of other property 20a Investment income b Investment expenses Other items and amounts (attach statement) 17b 17c 17d 17e 17f e 18a 18b 18c 19a Other Information 19b 20a 20b Form 1065 (2020) THIS FORM IS A SIMULATION OF AN OFFICIAL U.S. TAX FORM. IT IS NOT THE OFFICIAL FORM IT SELF. DO NOT USE THIS FORM FOR TAX FILINGS OR FOR ANY PURPOSE OTHER THAN EDUCATIONAL. 2021 McGraw-Hill Education. Required information 1065 PG 1 Schedule K Schedule K1 Francesca Schedule K1 Lance Form 1065 Schedule Ki Francesca. Schedule K-1 2020 Final K-1 K-1 Amended K-1 - OMB No. 1545-0123 Part III Partner's Share of Current Year Income, Deductions, Credits, and Other Items 1 Ordinary business income (loss) ) 15 Credits (Form 1065) Department of the Treasury Internal Revenue Service For calendar year 2020, or tax , year beginning ending 2020 20 2 Net rental real estate income (loss) Partner's Share of Income, Deductions, Credits, etc. See back of form and separate instructions. 3 Other net rental income (loss) 16 Foreign transactions 4 Guaranteed payments for services Partl Information About the Partnership A Partnership's employer identification number 4b Guaranteed payments for capital B Partnership's name, address, city, state, and ZIP code 4c Total guaranteed payments 5 Interest income CIRS Center where partnership filed return 6a Ordinary dividends D Check if this is a publicly traded partnership (PTP) 6b Qualified dividends 6c Dividend equivalents 17 Alternative minimum tax (AMT) items Part II Information About the Partner E Partner's SSN or TIN (Do not use TIN of a disregarded entity. See instructions.) 7 Royalties 8 Net short-term capital gain (loss) F Name, address, city, state, and ZIP code for partner entered in E. See instructions. n. II-------------- F Name, address, city, state, and ZIP code for partner entered in E. See instructions. 9a Net long-term capital gain (loss) G General partner or LLC member-manager Limited partner or other LLC member 9b 18 Tax-exempt income and nondeductible expenses H1 Domestic partner Foreign partner 9c Unrecaptured section 1250 gain A H2 If the partner is a disregarded entity (DE), enter the partner's TIN Name 10 Net section 1231 gain (loss) 11 Other income (loss) ( 11 What type of entity is this partner? 12 If this partner is a retirement plan (IRA/SEP/Keogh/etc.), check here 19 Distributions A J Partner's share of profit, loss, and capital (see instructions): Beginning Ending 12 Section 179 deduction Profit % 20 Other information QBL = Loss % % 13 Other deductions Z Capital % % Check if decrease is due to sale or exchange of partnership interest K Partner's share of liabilities: : Beginning Ending Nonrecourse S A Qualified nonrecourse S 14 Self-employment earnings (loss) financing Recourse S Check this box if Item Kincludes liability amounts from lower tier partnerships A L Partner's Capital Account Analysis Beginning capital account S Not Provided 21 More than one activity for at-risk purposes Capital contributed during the year S Current year net income (loss) S 22 More than one activity for passive activity purposes Other increase (decrease) (attach explanation) S Withdrawals & distributions S *. * See attached statement for additional information. Ending capital account S For IRS Use Only Other increase (decrease) (attach explanation) S Withdrawals distributions * See attached statement for additional information. Ending capital account S For IRS Use Only M Did the partner contribute property with a built-in gain or loss? Yes NO If Yes," attach statement (see instructions) N Partner's Share of Net Unrecognized Section 704(c) Gain or (Loss) Beginning $ Ending For Paperwork Reduction Act Notice, see Instructions for Form 1065. www.irs.gov/Form 1065 Cat No. 11394R Schedule K-1 (Form 1065) 2020 THIS FORM IS A SIMULATION OF AN OFFICIAL U.S. TAX FORM. IT IS NOT THE OFFICIAL FORM ITSELF. DO NOT USE THIS FORM FOR TAX FILINGS OR FOR ANY PURPOSE OTHER THAN EDUCATIONAL. 2021 McGraw-Hill Education. Required information [The following information applies to the questions displayed below.] The TimpRiders LP has operated a motorcycle dealership for a number of years. Lance is the limited partner, Francesca is the general partner, and they share capital and profits equally. Francesca works full time managing the partnership. Both the partnership and the partners report on a calendar-year basis. At the start of the current year, Lance and Francesca had bases of $12,300 and $5,300, respectively, and the partnership did not have any liabilities. During the current year, the partnership reported the following results from operations: Net sales Cost of goods sold Operating expenses Short-term capital loss Tax-exempt interest $1231 gain $ 715,000 535,000 200,000 7,000 7,000 11,000 On the last day of the year, the partnership distributed $5,300 each to Lance and Francesca. d. Using the information provided, prepare TimpRiders' page 1 and Schedule K to be included with its Form 1065 for the current year. Also, prepare a Schedule K-1 for Lance and Francesca. (Use 2021 tax rules regardless of year on tax form. Losses should be entered as negative numbers and input all other values as positive numbers) Form 1065 Page 1. OMB No. 1545-0123 Form 1065 Department of the Treasury Internal Revenue Service A Principal business activity 2020 U.S. Return of Partnership Income For calendar year 2020, or tax year beginning 2020, ending 20 Go to www.irs.gov/Form 1065 for instructions and the latest information. Name of Partnership TimpRiders, LP Type or Print Number, street, and room or suite no. If a P.O. box, see instructions. , D Employer identification number B Principal product or service E Date business started C Business code number City or town, state or province, country, and ZIP or foreign postal code F Total assets (see instructions) G Check applicable boxes: (1) Initial Return (2) Final Return (3) Name Change (4) Address Change (5) Amended Return H Check accounting method: (1) Cash ) (2) Accrual (3) Other (specify) 1 Number of Schedules K-1. Attach one for each person who was a partner at any time during the tax year . 2 J Check if Schedules C and M-3 are attached K Check if partnership: (1) Aggregated activities for section 465 at-risk purposes (2 (2) Grouped activities for section 469 passive activity purposes Caution: Include only trade or business income and expenses on lines 1a through 22 below. See instructions for more information. 1a Gross receipts or sales 1a 715,000 b Returns and allowances 1b c Balance Subtract line 1b from line 1a 1C 715,000 2 Cost of goods sold (attach Form 1125-A) 2 535,000 3 Gross profit. Subtract line 2 from line 3 180,000 Income 4 Ordinary income (loss) from other partnerships, estates, and trusts (attach statement) 4 5 Net farm profit (loss) (attach Schedule F (Form 1040 or 1040-SR)) 5 6 Net gain (loss) from Form 4797, Part II, line 17 (attach Form 4797) 6 7 Other income (loss) (attach statement) 7 8 Total income (loss). Combine lines 3 through 7 8 180.000 9 Salaries and wages (other than to partners) (less employment credits) 9 10 Guaranteed payments to partners 10 11 Repairs and maintenance 11 12 Bad debts 12 13 Rent 13 Deductions 14 Taxes and licenses 14 (see the 15 Interest (see instructions) 15 instructions 16a Depreciation (if required, attach Form 4562) 16a for b Less depreciation reported on Form 1125-A and elsewhere on return 16b 16c 8 Salaries and wages (other than to partners) (less employment credits) 9 10 Guaranteed payments to partners 10 11 Repairs and maintenance 11 12 Bad debts 12 13 Rent 13 Deductions 14 Taxes and licenses 14 (see the 15 Interest (see instructions) 15 instructions 16a Depreciation (if required, attach Form 4562) 16a for b Less depreciation reported on Form 1125-A and elsewhere on return 16b 16c limitations) 17 Depletion (Do not deduct oil and gas depletion.) 17 18 Retirement plans, etc 18 19 Employee benefit programs 19 20 Other deductions (attach statement) 20 21 Total deductions. Add the amounts shown in the far right column for lines 9 through 20 21 0 22 Ordinary business income (loss). Subtract line 21 from line 8 22 180.000 23 Interest due under the look back methodcompleted long-term contracts (attach Form 8697) 23 24 Interest due under the look-back methodincome forecast method (attach Form 8866) 24 25 BBA AAR imputed underpayment (see instructions) 25 Tax and 26 Other taxes (see instructions) 26 Payment 27 Total balance due. Add lines 23 through 26 . 27 28 Payment (see instructions) 28 29 Amount owed. If line 28 is smaller than line 27, enter amount owed 29 30 Overpayment. If line 28 is larger than line 27, enter overpayment 30 Under penalties of perjury, I declare that I have examined this return, including accompanying schedules and statements, and to the best of my knowledge and belief, it is true, correct, and complete. Declaration of preparer (other than partner or limited liability company member) is based on all information of which preparer has any knowledge. Sign May the IRS discuss this return with the Here preparer shown below? See instructions. Signature of partner or limited liability company member Date Yes No Print/Type preparer's name Preparer's signature Date Check if self-employed PTIN Paid Preparer Firm's name Firm's EIN Use Only Firm's address Phone no For Paperwork Reduction Act Notice, see separate instructions. Cat. No. 11390Z Form 1065 (2020) THIS FORM IS A SIMULATION OF AN OFFICIAL U.S. TAX FORM. IT IS NOT THE OFFICIAL FORM ITSELF. DO NOT USE THIS FORM FOR TAX FILINGS OR FOR ANY PURPOSE OTHER THAN EDUCATIONAL. 2021 McGraw-Hill Education. Form 1065 Schedule K. Page 4 Total amount 1 180,000 2 3a 3b 3c 0 4 4c 5 6b 6c 7 7 8 9a Form 1065 (2020) Schedule K Partners' Distributive Share Items Ordinary business income (loss) (page 1, line 22) 2 Net rental real estate income (loss) (attach Form 8825) 3a Other gross rental income (loss) b Expenses from other rental activities (attach statement) c Other net rental income (loss). Subtract line 3b from line 3a 4 Guaranteed payments: : a Services 4a b Capital 4b C Total. Add lines 4a and 4b 5 Interest income Income (Loss) 6 Dividends and dividend equivalents: a Ordinary dividends b b Qualified dividends C c Dividend equivalents 7 Royalties 8 Net short-term capital gain (loss) (attach Schedule D (Form 1065)) 9a Net long-term capital gain (loss) (attach Schedule D (Form 1065)) b Collectibles (28%) gain (loss) c Unrecaptured section 1250 gain (attach statement) 10 Net section 1231 gain (loss) (attach Form 4797) 11 Other income (loss) (see instructions) Type - 12 Section 179 deduction (attach Form 4562) 13a Contributions Deductions b Investment interest expense C e(2 Section 59(e) (2) expenditures: (1) Type d ) Other deductions (see instructions) Type 14a Net earnings (loss) from self-employment Self-Employment Gross farming or fishing income C Gross nonfarm income 15a Low-income housing credit (section 4205)) b Low-income housing credit (other) Credits Qualified rehabilitation expenditures (rental real estate) (attach Form 3468, if applicable) d Other rental real estate credits (see instructions) Type - e Other rental credits (see instructions) Type - If Other credits (see instructions) Type - 16a Name of country or U.S. possession b b Gross income from all sources 9b 9c 10 11 12 13a 13b (2) Amount 13c(2) 13d 14a 14b 14c 15a 15b C 15c 150 15e 15f 16b 16b 16c 16f 16a Name of country or U.S. possession b Gross income from all sources Gross income sourced at partner level Foreign gross income sourced at partnership level d Reserved for future use e Foreign branch category |f Passive category g General category Deductions allocated and apportioned at partner level i Interest expense i Other Deductions allocated and apportioned at partnership level to foreign source income k Reserved for future use I Foreign branch category Other (attach statement). Foreign Transactions 16h o Other (attach statement) m 16k Accrued 161 16m 17a Alternative Minimum Tax (AMT) Items Passive category n General category Total foreign taxes (check one): Paid 9 Reduction in taxes available for credit (attach statement) r Other foreign tax information (attach statement) 17a Post-1986 depreciation adjustment b Adjusted gain or loss Depletion (other than oil and gas) d Oil, gas, and geothermal propertiesgross income Oil, gas, and geothermal propertiesdeductions f Other AMT items (attach statement) 18a Tax-exempt interest income b Other tax-exempt income C Nondeductible expenses 19a Distributions of cash and marketable securities b Distributions of other property 20a Investment income b Investment expenses Other items and amounts (attach statement) 17b 17c 17d 17e 17f e 18a 18b 18c 19a Other Information 19b 20a 20b Form 1065 (2020) THIS FORM IS A SIMULATION OF AN OFFICIAL U.S. TAX FORM. IT IS NOT THE OFFICIAL FORM IT SELF. DO NOT USE THIS FORM FOR TAX FILINGS OR FOR ANY PURPOSE OTHER THAN EDUCATIONAL. 2021 McGraw-Hill Education. Required information 1065 PG 1 Schedule K Schedule K1 Francesca Schedule K1 Lance Form 1065 Schedule Ki Francesca. Schedule K-1 2020 Final K-1 K-1 Amended K-1 - OMB No. 1545-0123 Part III Partner's Share of Current Year Income, Deductions, Credits, and Other Items 1 Ordinary business income (loss) ) 15 Credits (Form 1065) Department of the Treasury Internal Revenue Service For calendar year 2020, or tax , year beginning ending 2020 20 2 Net rental real estate income (loss) Partner's Share of Income, Deductions, Credits, etc. See back of form and separate instructions. 3 Other net rental income (loss) 16 Foreign transactions 4 Guaranteed payments for services Partl Information About the Partnership A Partnership's employer identification number 4b Guaranteed payments for capital B Partnership's name, address, city, state, and ZIP code 4c Total guaranteed payments 5 Interest income CIRS Center where partnership filed return 6a Ordinary dividends D Check if this is a publicly traded partnership (PTP) 6b Qualified dividends 6c Dividend equivalents 17 Alternative minimum tax (AMT) items Part II Information About the Partner E Partner's SSN or TIN (Do not use TIN of a disregarded entity. See instructions.) 7 Royalties 8 Net short-term capital gain (loss) F Name, address, city, state, and ZIP code for partner entered in E. See instructions. n. II-------------- F Name, address, city, state, and ZIP code for partner entered in E. See instructions. 9a Net long-term capital gain (loss) G General partner or LLC member-manager Limited partner or other LLC member 9b 18 Tax-exempt income and nondeductible expenses H1 Domestic partner Foreign partner 9c Unrecaptured section 1250 gain A H2 If the partner is a disregarded entity (DE), enter the partner's TIN Name 10 Net section 1231 gain (loss) 11 Other income (loss) ( 11 What type of entity is this partner? 12 If this partner is a retirement plan (IRA/SEP/Keogh/etc.), check here 19 Distributions A J Partner's share of profit, loss, and capital (see instructions): Beginning Ending 12 Section 179 deduction Profit % 20 Other information QBL = Loss % % 13 Other deductions Z Capital % % Check if decrease is due to sale or exchange of partnership interest K Partner's share of liabilities: : Beginning Ending Nonrecourse S A Qualified nonrecourse S 14 Self-employment earnings (loss) financing Recourse S Check this box if Item Kincludes liability amounts from lower tier partnerships A L Partner's Capital Account Analysis Beginning capital account S Not Provided 21 More than one activity for at-risk purposes Capital contributed during the year S Current year net income (loss) S 22 More than one activity for passive activity purposes Other increase (decrease) (attach explanation) S Withdrawals & distributions S *. * See attached statement for additional information. Ending capital account S For IRS Use Only Other increase (decrease) (attach explanation) S Withdrawals distributions * See attached statement for additional information. Ending capital account S For IRS Use Only M Did the partner contribute property with a built-in gain or loss? Yes NO If Yes," attach statement (see instructions) N Partner's Share of Net Unrecognized Section 704(c) Gain or (Loss) Beginning $ Ending For Paperwork Reduction Act Notice, see Instructions for Form 1065. www.irs.gov/Form 1065 Cat No. 11394R Schedule K-1 (Form 1065) 2020 THIS FORM IS A SIMULATION OF AN OFFICIAL U.S. TAX FORM. IT IS NOT THE OFFICIAL FORM ITSELF. DO NOT USE THIS FORM FOR TAX FILINGS OR FOR ANY PURPOSE OTHER THAN EDUCATIONAL. 2021 McGraw-Hill Education.