Ryan Bogan (111-11-1112), Oscar Young (222-22-2223), Clark Coleman (333-33-3334), and Kim Hoffman (444-44-4445) are equal, active, and unrelated members in Bogan Engineering LLC (Bogan). Bogan is an engineering services for clients that build major bridges and highways in the Los Angeles area. The LLC's Federal D number is 55-5555556. It uses the cash basis and the calendar year and began operations on January 1, 2007. Its current address is 2501 La Cienega Boulevard, Suite 2100, Los Angeles, CA 90210. The financial information enclosed from the LLC's income statement for the current year. Recently, Bogan has taken advantage of bonus depreciation and 179 deductions and fully remodeled the premises and upgraded its leasehold improvements. This year, Bogan wrapped up its remodel with the purchase of $90,000 of office furniture for which it will claim a $168(k) deduction (For simplicity, assume that Cam uses the same cost recovery methods for both tax and financial purposes.) There is no depreciation adjustment for alternative minimum tax purposes. Bogan invests much of its excess cash in dividend paying stocks and tax-exempt securities. During the year, the LLC several securities transactions. On June 15, purchased 1,000 shares of Fountain, Inc. stock for $100,000; it sold those shares on December 15 for $75,000. On March 15 of last year, Bogan purchased 2,000 shares of Young Machinery, Inc. stock for $189,000; it sold those shares for $199,500 on December 15 of the current year. These transactions were reported to the IRS on Forms 1099-B; Bogans' basis in these shares was reported. Each member received an equal guaranteed payment for services rendered. Also, Ryan Bogan loaned the partnership $1,000,000 in 2009. It is an interest only note due in 2026. The LLC issued Ryan a 1099 INT for the interest on the loan. Net income per books is $1,101,200. On January 1, the members' capital accounts equaled $250,000 each. No additional capital contributions were made this year. In addition to their guaranteed payments, each member withdrew $200,000 cash during the year. All contributions and distributions have been in cash, so the LLC has no net unrecognized 704(c) gain or loss. The LLC's balance sheet as of December 31 of this year is also enclosed. Except for the Ryan Bogan loan, all debt is shared equally by the members. Each member has personally guaranteed the line of credit debt of the LLC. All members are active in LLC operations. For our purposes, assume that Bogans operations constitute one active trade or business for purposes of the passive activity and at-risk limitations. (Note that the $ 179 deduction is a business-related expense.). The appropriate business code for the entity is 237310. For the Form 1065, page 5, Analysis of Net Income, put all partners' allocations in cell 2(b)(11), per IRS instructions for an LLC. REQUIRED 1) Prepare a federal Form 1065, pages 1, 4, and 5, for Bogan Engineering LLC using tax basis information for Schedules L and M-2. Use the Intuit Pro connect software provided to you in Canvas to prepare Form 1065 Forms 4562, 8949, and Schedule D and any other forms you think are necessary. DO NOT PREPARE THE STATE TAX RETURNS 2) Prepare Schedule K-1 for all LLC members. Use any address for the partners. 3) You need to prepare an explanation write up on how you treated the items is the facts above. The explanation is meant to determine if you understand the 1065 assignment. Please explain how you determined what is taxable, not taxable, deductible, or not deductible. Use the appropriate authorities to document your conclusions. Also, provide detail computations of your book/tax differences and computation of taxable income. Finally, please provide a computation each partner's tax basis (assume the beginning capital account is the opening tax basis) and document the tax consequences of all transactions between the members and LLC. If the facts aren't in the case, please make your own assumptions and document them Prepare this is in a tax memorandum format and it should be single-spaced. 4) Prepare a transmittal letter to one of the partners that will be transmitted to the partner with their schedule K-1. Bogan Engineering Financial Statements-Cash Basis 12/31/2021 Consulting Revenues Interest Income Bank of America Interest from City of Newport Beach Boi Long Term Capital Gains Short term Capital Loss Ordinary Dividends Qualified Dividends Total Revenue 6,500,000 5,000 25,000 10,500 (25,000) 50,000 15,000 6,580,500 Guaranteed Payments W-2 Wages Advertising Charitiable Contributions Depreciation Repairs and Maintenance Interest Expense-Line of Credit Interest Expense- Loan from Bogan** Legal and Accounting Fees* Meals Travel Entertainment Insurance Office Rent Office Expense Payroll Taxes Utilities Political Contributions Total Expenses 2,500,000 750,000 450,000 86,000 90,000 25,000 50,000 50,000 132,000 250,000 300,000 200,000 52,000 175,000 200,000 100,000 54,300 15,000 5,479,300 Book Income 1,101,200 * Includes $50,000 Legal Fees from a failed acquisition of another engineering firm ** 1099 was issued to Mr. Bogan 12/31/2019 12/31/2020 Cash 2,500,000 2,051,200 Marketable Securities 500,000 1,250,000 Office Equipment 960,000 1,050,000 Accumulated Depreciation (960,000) (1,050,000) Total Assets 3,000,000 3,301,200 Line of Credit Loan from Bogan Capital Account-Bogan Capital Account-Young Capital Account-Coleman Capital Account-Hoffman Total Liabilities and Equity 1,000,000 1,000,000 250,000 250,000 250,000 250,000 3,000,000 1,000,000 1,000,000 325,300 325,300 325,300 325,300 3,301,200 Prepare a federal Form 1065, pages 1, 4, and 5, for Salmon Engineering LLC using tax basis information for Schedules L and M2.prepare Form 1065 Forms 4562, 8949, and Schedule D and any other forms you think are necessary