Ryan Ross (111-11-1112), Oscar Omega (222-22-2223), Clark Carey (333-33-3334), and Kim Kardigan (444-44-4445) are equal active members in ROCK the Ages LLC. ROCK serves as agents and managers for prominent musicians in the Los Angeles area. The LLC's Federal ID number is 55-5555555. It uses the cash basis and the calendar year and began operations on January 1, 2006. Its current address is 6102 Wilshire Boulevard, Suite 2100, Los Angeles, CA 90036. ROCK was the force behind such music icons as Rhiannon, Burgundy Six, Elena Gomez, Tyler Quick, the Moonwalkers, and Conjuring Dragons and has had a very profitable year. The following information was taken from the LLC's income statement for the current year.
Revenues
Fees and commissions $4,800,000
Taxable interest income from bank deposits 1,600
Tax-exempt interest 3,200
Net gain on stock sales 4,000
Total revenues $4,808,800
Expenses
Advertising and public relations $380,000
Charitable contributions 28,000
Section 179 expense 20,000
Employee salaries and wages 1,000,000
Guaranteed payment (services), Ryan Ross, office manager 800,000
Guaranteed payment (services), other members 600,000
Entertainment, subject to 50% disallowance 200,000
Travel 320,000
Legal and accounting fees 132,000
Office rentals paid 80,000
Interest expense on operating line of credit 10,000
Insurance premiums 52,000
Office expense 200,000
Payroll taxes 92,000
Utilities 54,800
Total expenses $3,968,800
During the past couple of years, ROCK has taken advantage of bonus depreciation and 179 deductions and fully remodeled the premises and upgraded its leasehold improvements. This year, ROCK wrapped up its remodel with the purchase of $20,000 of office furniture for which it will claim a 179 deduction. (For simplicity, assume that ROCK uses the same cost recovery methods for both tax and financial purposes.) There is no depreciation adjustment for alternative minimum tax purposes. While the property is fully depreciated, it is not beyond the end of its depreciable life for purposes of the qualified business income deduction.
ROCK invests much of its excess cash in non-dividend-paying growth stocks and tax-exempt securities. During the year, the LLC sold two securities. On June 15, 2018, ROCK purchased 1,000 shares of Tech, Inc., stock for $100,000; it sold those shares on December 15, 2018, for $80,000. On March 15, 2017, ROCK purchased 2,000 shares of BioLabs, Inc., stock for $136,000; it sold those shares for $160,000 on December 15, 2018. These transactions were reported to the IRS on Forms 1099B; ROCK's basis in these shares was reported.
Net income per books is $840,000. The firm's activities do not constitute "qualified production activities" for purposes of the 199 deduction. On January 1, 2018, the members' capital accounts equaled $200,000 each. No additional capital contributions were made in 2018. In addition to their guaranteed payments, each member withdrew $250,000 cash during the year. The LLC's balance sheet as of December 31, 2018, is as follows.
Beginning Ending
Cash $444,000 $??
Tax-exempt securities 120,000 120,000
Marketable securities 436,000 300,000
Leasehold improvements, furniture, and equipment 960,000 980,000
Accumulated depreciation (960,000) (980,000)
Total assets $1,000,000 $??
Operating line of credit $200,000 $160,000
Capital, Ross 200,000 ??
Capital, Omega 200,000 ??
Capital, Carey 200,000 ??
Capital, Kardigan 200,000 ??
Total liabilities and capital $1,000,000 $??
All debt is shared equally by the members. Each member has personally guaranteed the debt of the LLC. All members are active in LLC operations. the business code for the entity is 711410.
Prepare the 2018 Form 1065, Form 8949, Schedule D, Form 4562 and the requested Federal statements for ROCK the Ages LLC. Prepare Schedule K1 for Ryan Ross.
If an amount box does not require an entry or the answer is zero, enter "0".
Enter all amounts as positive numbers, unless otherwise instructed.
If required, round amounts to the nearest dollar.
Make realistic assumptions about any missing data
i just want the wrong answer showing in the photos
Note: This problem is for the 2018 tax year.
Ryan Ross (111-11-1112), Oscar Omega (222-22-2223), Clark Carey (333-33-3334), and Kim Kardigan (444-44-4445) are equal active members in ROCK the Ages LLC. ROCK serves as agents and managers for prominent musicians in the Los Angeles area. The LLC's Federal ID number is 55-5555555. It uses the cash basis and the calendar year and began operations on January 1, 2006. Its current address is 6102 Wilshire Boulevard, Suite 2100, Los Angeles, CA 90036. ROCK was the force behind such music icons as Rhiannon, Burgundy Six, Elena Gomez, Tyler Quick, the Moonwalkers, and Conjuring Dragons and has had a very profitable year. The following information was taken from the LLC's income statement for the current year.
| Revenues | |
| Fees and commissions | $4,800,000 |
| Taxable interest income from bank deposits | 1,600 |
| Tax-exempt interest | 3,200 |
| Net gain on stock sales | 4,000 |
| Total revenues | $4,808,800 |
| Expenses | |
| Advertising and public relations | $380,000 |
| Charitable contributions | 28,000 |
| Section 179 expense | 20,000 |
| Employee salaries and wages | 1,000,000 |
| Guaranteed payment (services), Ryan Ross, office manager | 800,000 |
| Guaranteed payment (services), other members | 600,000 |
| Entertainment, subject to 50% disallowance | 200,000 |
| Travel | 320,000 |
| Legal and accounting fees | 132,000 |
| Office rentals paid | 80,000 |
| Interest expense on operating line of credit | 10,000 |
| Insurance premiums | 52,000 |
| Office expense | 200,000 |
| Payroll taxes | 92,000 |
| Utilities | 54,800 |
| Total expenses | $3,968,800 |
During the past couple of years, ROCK has taken advantage of bonus depreciation and 179 deductions and fully remodeled the premises and upgraded its leasehold improvements. This year, ROCK wrapped up its remodel with the purchase of $20,000 of office furniture for which it will claim a 179 deduction. (For simplicity, assume that ROCK uses the same cost recovery methods for both tax and financial purposes.) There is no depreciation adjustment for alternative minimum tax purposes. While the property is fully depreciated, it is not beyond the end of its depreciable life for purposes of the qualified business income deduction.
ROCK invests much of its excess cash in non-dividend-paying growth stocks and tax-exempt securities. During the year, the LLC sold two securities. On June 15, 2018, ROCK purchased 1,000 shares of Tech, Inc., stock for $100,000; it sold those shares on December 15, 2018, for $80,000. On March 15, 2017, ROCK purchased 2,000 shares of BioLabs, Inc., stock for $136,000; it sold those shares for $160,000 on December 15, 2018. These transactions were reported to the IRS on Forms 1099B; ROCK's basis in these shares was reported.
Net income per books is $840,000. The firm's activities do not constitute "qualified production activities" for purposes of the 199 deduction. On January 1, 2018, the members' capital accounts equaled $200,000 each. No additional capital contributions were made in 2018. In addition to their guaranteed payments, each member withdrew $250,000 cash during the year. The LLC's balance sheet as of December 31, 2018, is as follows.
| Beginning | | Ending |
| Cash | $444,000 | | $?? |
| Tax-exempt securities | 120,000 | 120,000 |
| Marketable securities | 436,000 | 300,000 |
| Leasehold improvements, furniture, and equipment | 960,000 | 980,000 |
| Accumulated depreciation | (960,000) | (980,000) |
| Total assets | $1,000,000 | $?? |
| | |
| Operating line of credit | $200,000 | $160,000 |
| Capital, Ross | 200,000 | ?? |
| Capital, Omega | 200,000 | ?? |
| Capital, Carey | 200,000 | ?? |
| Capital, Kardigan | 200,000 | ?? |
| Total liabilities and capital | $1,000,000 | $?? |
|
All debt is shared equally by the members. Each member has personally guaranteed the debt of the LLC. All members are active in LLC operations. the business code for the entity is 711410. Prepare the 2018 Form 1065, Form 8949, Schedule D, Form 4562 and the requested Federal statements for ROCK the Ages LLC. Prepare Schedule K1 for Ryan Ross.
- If an amount box does not require an entry or the answer is zero, enter "0".
- Enter all amounts as positive numbers, unless otherwise instructed.
- If required, round amounts to the nearest dollar.
- Make realistic assumptions about any missing data.
Federal Stalament Complete Federal Statements for ROCK te Ages LLC 2018 Federal Statements Rock the Ages LLC Page 1 55-5555555 Statement 1 Form 1065, Line 20 Other Deductions 380,000 Turance 52,000 Legal and Accounting 132,000 100,000 Omo Bepense 200,000 320,000 tes 54,800 5 Total 1,238,800 Statement 2 Form 1065, Schedule K Line 13a Charitable Contributions Cash Contributions - 6046 Limitation 28.000 28,000 Statements Form 1065, Schedule K, Line 20 Other Reportable Items Section 1994 Qualified Business Income 200,000 X Section 1994 W-2 Wages Section 19 Unded Basis 1,000,000 200,000 x Statement 4 Form 1065, Schedule Line 6 Other Current Assets Ending Credo 111-11-1112 8 Net short-term captain 17 Alternative minimum tax (AMT) items -5,000 Partner's name, address, oty, state, and ZIP code Ryan Ross 15520 West Earlson Street Pacific Palisades, CA 90272 9 Netlong-term capital gain 6.000 General partner or LLC member. Umited partner or other LLC manager member Domestic partner Foreign partner 9b Collectibles (2845) gain() 90 Unrecaptured ction 1250 18 Txart income and mordeductible expenses What type of entity is this partner? Individual 10 A If this partner is a relirement plan (TRA/SE/Keog/etc.), check here Net section 1231 gainos) 800 11 Other income c 25,000 Partner's share of profit, loss, and capital (see instructions): Beginning Ending Prora 25 25 S 12 Section 179 deduction 5.000 19 Distributions A 250,000 25 25 13 other deductions A Capital) 25 25 7,000 20 Other information 400 y 44 250,000 Ending Partner's share of liabilities: Beginning Norcourse Qualified non course 5 200,000 X 9 N 14 Selemployment earnings 200,000 x 5 1,044.800 Recourse $ 50.000 200,000 x Se stached statement for sations information $ 200,000 Partner's capital account analysis: Beginning capital account Capital contributed during the year Current year increase (decrease) 5 3 210,000 Wearanas 3., $ 250.000 Ending capital count $ 160.000 For Use Only Section 704[b) book Tex basis - Other (explain) Yes M Did the partner contribute property with a built-in gain or loss No If "Yes," attach statement (see instructions) BAA For Paperwork Reduction Act Notice, see Instructions for Form 1065 Schedule K-1 (Form 1065) 2019 turn Preparation Problem 2 Calculator Form 1065 Ja. Prepare the 2018 Form 1065, pages 1, 4, and 5, for ROCK the Ages LLC using tax basis information for Schedules L and M-2. If required, use the minus sign to indicate a loss. Form 1065 U.S. Return of Partnership Income OMB No. 1545-0123 Department of the For calendar year 2018, or tax year beginning ___ 2018, ending 20 Treasury Internal Go www.irs.gov/Form 1065 for instructions and the latest information. 2018 Revenue Service A Principal business activity D Employer identification no Musician Agents 55-5555555 Type ROCK the Ages LLC B Principal product or service E Date business started or Agent Services 6102 Wilshire Boulevard Suite 2100 1/01/2006 Print Los Angeles, CA 90036 C Business code number F Total assets (see instructions) 711410 $ 800,000 Check applicable boxes: (1) Initial (2) Final (3) Name change (4) Address (5) Amended return return change return HCheck accounting method: (1) Cash (2) Accrual (3) Other (specify) I Number of Schedules K-1. Attach one for each person who was a partner at any time during the tax year 4 Check if Schedules and M-3 are attached Caution: Include only trade or business income and expenses on lines ia through 22 below. See the instructions for more information. 1a Gross receipts or sales la 4,800,000 b Returns and allowances 1b c Balance. Subtract line 1b from line la... 1c 4,800,000 2 3 4,800,000 V Income 4 2 Cost of goods sold (attach Form 1125-A) 3 Gross profit. Subtract line 2 from line 10. 4 Ordinary income (loss) from other partnerships, estates, and trusts (attach statement) 5 Net farm profit (loss) (attach Schedule F (Form 1040))....... 6 Net gain (loss) from Form 4797, Part II, line 17 (attach Form 4797) 7 Other income (loss) (attach statement) 8 Total income (loss). Combine lines 3 through 7. 5 6 7 4,800,000 9 Salaries and wages (other than to partners) (less employment credits) 9 1,000,000 V v2.cengagenow.com/ilrn/take Assignment/takeAssignmentMain.do?invoker=&take AssignmentSess n Preparation Problem 2 Calculator 9 Salaries and wages (other than to partners) (less employment credits) 9 1,000,000 10 Guaranteed payments to partners... 10 1,400,000 11 11 Repairs and maintenance 12 Bad debts 12 13 Rent ...... 13 80,000 Deductions see the instructions for limitations) 14 Taxes and licenses 14 92,000 15 16b 160 17 18 19 21 22 15 Interest (see instructions).. 10,000 16a Depreciation (if required, attach Form 4562) 16a b Less depreciation reported on Form 1125-A and elsewhere on return 17 Depletion (Do not deduct oil and gas depletion.) 18 Retirement plans, etc. 19 Employee benefit programs. 20 Other deductions (attach statement) 20 1,238,800 21 Total deductions. Add the amounts shown in the far right column for lines 9 through 20 3,820,800 22 Ordinary business income (loss). Subtract line 21 from line 8 979,200 23 Interest due under the look back method-completed long-term contracts (attach Form 8697)... 24 Interest due under the look back method-income forecast method (attach Form 8866). 25 BBA AAR imputed underpayment (see instructions).. 26 Other taxes (see instructions). 27 Total balance due. Add lines 23 through 26 27 28 Payment (see instructions)....... 29 Amount owed. If line 28 is smaller than line 27, enter amount owed 30 Overpayment. If line 28 is larger than line 27, enter overpayment. 30 Sign 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 Here liability company member) is based on all information of which preparer has any knowledge. 23 24 Tax and Payments 25 26 28 29 May the IRS discuss this return with the preparer shown below? See instructions. Yes No Signature of partner or limited liability company member Date Preparation Problem 2 Calculator 55-5555555 Page 4 Form 1065 (2018) ROCK the Ages LLC Schedule K Partners' Distributive Share Items Total amount 1 Ordinary business income (loss) (page 1, line 22). 1 979,200 2 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 3b 30 4 Guaranteed payments. 1,400,000 5 Interest income ... 5 1,600 6 Dividends and dividend equivalents: Income (Loss) a Ordinary dividends. b Qualified dividends Dividend equivalents 6b c 60 7 7 Royalties 3 Net short-term capital gain (loss) (attach Schedule D (Form 1065)) 8 -20,000 9a 24,000 9b 9c 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). 10 11 12 20,000 13a Contributions .. 13a 28,000 V Deductions b Investment interest expense.... 13b c Section 59(e)(2) expenditures: (1) Type (2) Amount 13c(2) 13d 14a 2,379,200 Employ Self ment d other deductions (see instructions) Type - 14a Net earnings (loss) from self-employment. b Gross farming or fishing income. Gross nonfarm income 14b 14c n Preparation Problem 2 Calculator 15e 15f 16b 160 16e 16h Foreign Transactions . 16j e Other rental credits (see instructions) Type - f Other credits (see instructions) Type - 16a Name of country or U.S. possession b Gross income from all sources... c Gross income sourced at partner level. Foreign gross income sourced at partnership level d Section 951A category e Foreign branch category f Passive category ---- 9 General category ---- h Other (attach statement) Deductions allocated and apportioned at partner level i Interest expense Other. Deductions allocated and apportioned at partnership level to foreign source income k Section 951A category I Foreign branch category m Passive category n General category o Other (attach statement) p Total foreign taxes (check one): Paid = Accrued a q Reduction in taxes available for credit (attach statement). 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 properties-gross income e Oil, gas, and geothermal properties-deductions f Other AMT items (attach statement). 161 160 16p 169 17a 17b 17c Alternative Minimum Tax (AMT) Items 170 17e 17f 18a Tax-exempt interest income. 18a 3,200 b Other tax-exempt income 18b Nondeductible expenses. 180 100,000 Other Information 19a Distributions of cash and marketable securities 19a 1,000,000 b Distributions of other property. 19b 20a Investment income 20a 1,600 20b b Investment expenses. c Other items and amounts (attach statement) Form 1065 (2018) Other items and amounts (attach statement) Form 1065 (2018) Page 2,336,800 Form 1065 (2018) ROCK the Ages LLC 55-5555555 Analysis of Net Income (Loss) Net income (loss). Combine Schedule K, lines 1 through 11. From the result, subtract the sum of Schedule K, lines 12 through 13d, and 16p 1 2 Analysis by partner (0) (ii) Individual (11) Individual (iv) (v) Exempt type: Corporate (active) (passive) Partnership Organization a General partners b Limited partners 2,336,800 (vi) Nominee/Other ScheduleL Balance Sheets per Books Beginning of tax year (a) (b) End of tax year (d) Assets (c) 1 Cash. 444,000 380,000 2a Trade notes and accounts receivable b Less allowance for bad debts. 3 Inventories... U.S. government obligations 4 5 Tax-exempt securities. 120,000 120,000 436,000, 300,000 6 Other current assets (attach statement) ........ Ta Loans to partners (or persons related to partners). Mortgage and real estate loans. Other investments (attach statement). 9a Buildings and other depreciable assets 960,000 980,000 b Less accumulated depreciation 960,000 980,000 10a Depletable assets .... bless accumulated depletion. 11 Land (net of any amortization) 12a Intangible assets (amortizable only) bless accumulated amortization. Other assets (attach statement) Preparation Problem 2 Calculator SCUccoce 13 Other assets (attach statement) 14 Total assets 1,000,000 800,000 Liabilities and Capital 200,000 160,000 15 Accounts payable. 16 Mortgages, notes, bonds payable in less than 1 year 17 Other current liabilities (attach statement).. 18 All nonrecourse loans. 19a Loans from partners (or persons related to partners) b Mortgages, notes, bonds payable in 1 year or more 20 Other liabilities (attach statement) 21 Partners' capital accounts Total liabilities and capital 22 800,000 640,000 1,000,000 800,000 3,200 Schedule M-1 Reconciliation of Income (Loss) per Books With Income (Loss) per Return Note: The partnership may be required to file Schedule M-3. See instructions. 1 Net income (loss) per books .......... 840,000 6 Income recorded on books this year not 2 Income included on Schedule K, lines 1, 2, included on Schedule K, lines 1 through 11 30, 5, 6a, 7, 8, 9, 10, and 11, not (itemize): recorded on books this year (itemize): -- a Tax-exempt interests 3,200 3 Guaranteed payments (other than health 1,400,000 7 Deductions included on Schedule K, lines 1 insurance). through 13d, and 16p, not charged against 4 Expenses recorded on books this year not book income this year (itemize): included on Schedule K, lines 1 through a Depreciation $ 13d, and 16p (itemize): a Depreciation $ 8 Add lines 6 and 7. Travel and entertainment $ b 100,000 100,000 9 Income (loss) (Analysis of Net Income (Loss), line 1). Subtract line 8 from line 5. 5 Add lines 1 through 4.... 2,340,000 Schedule M-2 Analysis of Partners' Capital Accounts Balance at beginning of year ....... 800,000 6 Distributions: a Cash. 3,200 2,336,800 1,000,000 V Capital I ACC 30 x % ACC 30X 1. Cenga x C Get Hox C Sign In x icros X - My Ho X . v2.cengagenow.com/ilrn/take Assignment/takeAssignmentMain.do?invoker=&takeAssignmentSes Calculator n Preparation Problem 2 TTUVETTUCCE b 100,000 100,000 9 Income (loss) (Analysis of Net Income (Loss), line 1). Subtract line 8 from line 5.. 2,336,800 5 Add lines 1 through 4............. 2,340,000 Schedule M-2 Analysis of Partners' Capital Accounts Balance at beginning of year 1 800,000 6 Distributions: a Cash 1,000,000 2 b Property ........ Capital contributed: a Cash. b Property 7 Other decreases (itemize): 3 Net income (loss) per books. 840,000 V 1,000,000 4 Other increases (itemize): 8 Add lines 6 and 7 S Add lines 1 through 4...... 1,640,000 9 Balance at end of year. Subtract line 8 from line 5 640,000 Form 1065 (2018) RAA Form 8949 Prepare Form 8949 for ROCK the Ages LLC. If required, use the minus sign to indicate a loss. OMB No. 1545-0074 Form 8949 Sales and Other Dispositions of Capital Assets Department of the Go to www.irs.gov/Form8949 for instructions and the latest information, 2018 Treasury Internal File with your Schedule D to list your transactions for lines 1b, 2, 3, Bb, 9, and 10 of Attachment Revenue Service Schedule D. Sequence No. 12A Name(s) shown on return SSN or taxpayer identification number ROCK the Ages LLC 55-5555555 Before you check Box A, B, or below, see whether you received any form(s) 1099-8 or substitute statement(s) from your broker. A substitute statement will have the same information as Form 1099-8. Either will show whether your basis (usually your cost) was reported to the IRS by your broker and may even tell you which box to check Part I Short-Term. Transactions involving capital assets you held 1 year or less are generally short-term (see instructions). For long- term transactions, see page 2 Note: You may aggregate all short-term transactions reported on Form(s) 1099-B showing basis was reported to the IRS and for which no adjustments or codes are required. Enter the totals directly on Schedule D, line 1a; you aren't required to report these transactions on Form 8949 (see instructions). You must check Box A, B, or below. Check only one box. If more than one box applies for your short-term transactions, complete a separate Form 8949, page 1, for each applicable box. If you have more short-term transactions than will fit on this page for one or more of the boxes, complete as many forms with the same box checked as you need. D(A) Short-term transactions reported on Form() 1099-8 showing basis was reported to the IRS (see Note above) (B) Short-term transactions reported on Form(s) 1099-3 showing basis wasn't reported to the IRS B (C) Short-term transactions not reported to you on Form 1099- Adjustment, if any, to gain or loss. If you enter an amount in (h) column (o), enter a (e) Gain or (loss). (a) code in column (1). See Subtract column (e) (c) (d) Cost or other basis. (b) the separate Description of property Date sold or Proceeds (sales from column (d) See the Note below Date acquired instructions. and combine the (Example: 100 shares disposed of (Mo., day, yr.) price) (see and see Column (e) XYZ Co.) (Mo., day, y.) result with column (0) instructions) in the separate (9) instructions Code(s) (0) Amount of from adjustment instructions 1,000 Shares Tech, Inc. 06/15/18 12/15/18 80,000 100,000 - 20,000 Uuuu ZUUUU 2 Totals. Add the amounts in columns (d), (e), (o), and (h) (subtract negative amounts). Enter each total here and include on your schedule D line 1b (if Box A above is checked), line 2 (if Box B above is checked), or line 3 (f Box C above is checked) 80,000 100,000 -20,000 Note: If you checked Box A above but the basis reported to the IRS was incorrect, enter in column (e) the basis as reported to the IRS, and enter an adjustment in column (a) to correct the basis. See Column() in the separate instructions for how to figure the amount of the adjustment. BAA For Paperwork Reduction Act Notice, see your tax return instructions. Form 8949 (2018) Form 8949 (2018) Attachment Sequence No. 12A Page 2 Name(s) shown on return. Name and SSN or taxpayer identification no. not required if shown on SSN or taxpayer identification number other side 55-5555555 ROCK the Ages LLC Before you check Box D, E, or F below, see whether you received any Form(s) 1099-8 or substitute statement(s) from your broker. A substitute statement will have the same information as Form 1099-8. Either will show whether your basis (usually your cost) was reported to the IRS by your broker and may even tell you which box to check Part II Long-Term. Transactions involving capital assets you held more than 1 year are generally long term (see instructions). For short- term transactions, see page 1. Return Preparation Problem 2 Calculator (b) Description of property Date sold or Date acquired (Example: 100 shares disposed of (Mo., day, yr.) XYZ Co.) (Mo., day, yr.) Proceeds (sales price) (see instructions) (e) Cost or other basis. See the Note below and see Column (e) in the separate instructions column (g), enter a Gain or (less). code in column (F). See Subtract column (e) the separate from column (d) Instructions. and combine the (0) result with column (a) Code(s) (0) Amount of from adjustment instructions 2,000 Shares BioLabs, Inc. 3/15/17 12/15/18 160,000 195,000 24,000 2 Totals. Add the amounts in columns (d), (e), (o). and (h) (subtract negative amounts). Enter each total here and include on your schedule D, line Sb Gif Box D above is checked), line 9 of Box E above is checked), or line 10 (if Box F above is checked) ... 160,000 136,000 24,000 Note: If you checked Box D above but the basis reported to the IRS was incorrect, enter in column (e) the basis as reported to the IRS, and enter an adjustment in column (o) to correct the basis. See Column() in the separate instructions for how to figure the amount of the adjustment. BALON Return Preparation Problem 2 Calculator Schedule Complete Schedule D for ROCK the Ages LLC. If required, use the minus sign to indicate a loss. OMB No. 1545-0123 SCHEDULED (Form 1065) Capital Gains and Losses Attach to Form 1065 or Form 8865. Department of the Go to www.irs.gov/Form 1065 for instructions and the latest information. 2018 Treasury Internal Use Form 8949 to list your transactions for lines 1b, 2, 3, Bb, 9, and 10. Revenue Service Name of partnership Employer identification number ROCK the Ages LLC 55-5555555 Part 1 Short-Term Capital Gains and Losses-Generally Assets Held One Year or Less (see instructions) (h) Gain or See instructions for how to figure the amounts to enter on the (a) (loss) lines below. Adjustments to Subtract column (d) (e) gain or loss from (e) from column Proceeds (sales Cost (or other Form(s) 8949, This form may be easier to complete if you round off cents to (d) and combine price) basis) Part I, line 2 whole dollars. the result with column (9) column (0) la Totals for all short-term transactions reported on Form 1099-B for which basis was reported to the IRS and for which you have no adjustments (see instructions). However, if you choose to report all these transactions on Form 8949, leave this line blank and go to line 1b.... 1b Totals for all transactions reported on Form(s) 8949 with Box A checked.. 2 Totals for all transactions reported on Form(s) 8949 with Box B checked. 3 Totals for all transactions reported on Form(s) 8949 with Box C checked. 80,000 100,000 -20,000 4 Short-term capital gain from installment sales from Form 6252, line 26 or 37 4 5 Short-term capital gain or (loss) from like-kind exchanges from Form 8824 5 6 Partnership's share of net short-term capital gain (loss), including specially allocated short-term capital gains (losses), from other partnerships, estates, and trusts.. 6 7 Net short-term capital gain or (loss). Combine lines 1a through 6 in column (h). Enter here and on Form 1065, Schedule K line 8 or 111 or Form 8865, Schedule K line 8 or 11 - 20,000 Return Preparation Problem 2 Calculator Box C checked. 80,000 100,000 -20,000 4 Short-term capital gain from installment sales from Form 6252, line 26 or 37 4 5 Short-term capital gain or loss) from like-kind exchanges from Form 3824.... 5 6 Partnership's share of net short-term capital gain (loss), including specially allocated short-term capital gains (losses), from other partnerships, estates, and trusts .. 6 7 Net short-term capital gain or (loss). Combine lines ia through 6 in column (h). Enter here and on Form 1065, Schedule K, line 8 or 11; or Form 8865, Schedule K, line 8 or 11. 7 -20,000 Part II Long-Term Capital Gains and Losses--Generally Assets Held More Than One Year (see instructions) (h) Gain or See instructions for how to figure the amounts to enter on the (9) (loss) lines below. Adjustments to Subtract column (d) gain or loss from (e) from column Proceeds (sales Cost (or other Form(s) 8949, This form may be easier to complete if you round off cents to (d) and combine price) basis) Part II, line 2, whole dollars. the result with column (9) column (9) Ba Totals for all long-term transactions reported on Form 1099 B for which basis was reported to the IRS and for which you have no adjustments (see instructions). However, if you choose to report all these transactions on Form 8949, leave this line blank and go to line 8b.... Bb Totals for all transactions reported on Form(s) 8949 with Box D checked... 9 Totals for all transactions reported on Form(s) 8949 with Box E checked. 10 Totals for all transactions reported on Form(s) 8949 with Box F checked.. 160,000 136,000 24,000 11 Long-term capital gain from installment sales from Form 6252, line 26 or 37 11 12 Long-term capital gain or (loss) from like-kind exchanges from Form 3824 12 Partnership's share of net long-term capital gain (loss), including specially allocated long-term capital gains 13 13 (losses), from other partnerships, estates, and trusts 14 Capital gain distributions (see instructions) ........ 14 15 Net long-term capital gain or loss). Combine lines 8a through 14 in column (h). Enter here and on Form 1065, Schedule K, line 9a or 11; or Form 8865, Schedule K, line 9a or 11 15 24,000 BAA For Paperwork Reduction Act Notice, see your tax return instructions. Schedule D (Form 1065) 2018 Feedback Form 4562 Prepare Form 4562 for ROCK the Ages LLC. The threshold cost of Section 179 property for 2018 is $2,500,000 and the maximum deduction is $1,000,000 OMB No. 1545-0172 2018 Attachment Sequence No. 179 Identifying number 55-5555555 Form 4562 Depreciation and Amortization Department of the (Including Information on Listed Property) Treasury Internal Attach to your tax return. Revenue Service (99) Go to www.irs.gov/Form4562 for instructions and the latest information. Name(s) shown on return ROCK the Ages LLC Business or activity to which this form relates Form 1065 Part I Election To Expense Certain Property Under Section 179 Note: If you have any listed property, complete Part V before you complete Part 1 1 Maximum amount (see instructions) ? Total cost of section 179 property placed in service (see instructions) 3 Threshold cost of section 179 property before reduction in limitation (see instructions) 4 Reduction in limitation. Subtract line 3 from line 2. If zero or less, enter 0 5 Dollar limitation for tax year. Subtract line 4 from line 1. If zero or less, enter .O. If married filing separately, See instructions 1 1,000,000 2 20,000 3 2,500,000 4 5 1,000,000 (a) Description of property (b) Cost (business use only) (c) Elected cost Office Furniture 20,000 20,000 7 Listed property. Enter the amount from line 29. 7 8 8 Total elected cost of section 179 property. Add amounts in column (c), lines 6 and 7 20,000 9 9 20,000 Tentative deduction. Enter the smaller of line 5 or line 8. 10 10 0 Carryover of disallowed deduction from line 13 of your 2017 Form 4562.. 11 11 Business income limitation. Enter the smaller of business income (not less than zero) or line S. See instrs. 1,000,000 12 Section 179 pxnence deduction. Add lines 9 and 10. but don't enter more than line 11 12 2nnnn v2.cengagenow.com/ilm/takeAssignment/takeAssignmentMain.do?invoker=&takeAssignmentSessic arn Preparation Problem 2 Calculator 8 Total elected cost of section 179 property. Add amounts in column (c), lines 6 and 7. 8 20,000 9 Tentative deduction. Enter the smaller of line 5 or line 8 9 20,000 V 10 Carryover of disallowed deduction from line 13 of your 2017 Form 4562. 10 o 11 Business income limitation. Enter the smaller of business income (not less than zero) or line 5. See instrs. 11 1,000,000 12 20,000 V 12 Section 179 expense deduction. Add lines 9 and 10, but don't enter more than line 11. 13 Carryover of disallowed deduction to 2019. Add lines 9 and 10, less line 12. 13 0 14 15 16 Note: Don't use Part II or Part III below for listed property. Instead, use Part V. Part II Special Depreciation Allowance and Other Depreciation (Don't include listed property. See instructions.) 14 Special depreciation allowance for qualified property (other than listed property) placed in service during the tax year. See instructions 15 Property subject to section 168()(1) election 16 Other depreciation (including ACRS) Part III MACRS Depreciation (Don't include listed property. See instructions.) Section A 17 MACRS deductions for assets placed in service in tax years beginning before 2018 17 18 If you are electing to group any assets placed in service during the tax year into one or more general asset accounts, check here.... Section B-Assets placed in Service During 2018 Tax Year Using the General Depreciation System (c) Basis for (b) Month and (a) Classification of depreciation (d) Recovery (9) Depreciation year placed in (business/investment (e) Convention (1) Method property period deduction service use only see instructions) 19a 3-year property b 5-year property c7-year property d 10-year property e 15-year property f 20-year property S/L g 25-year property h Residential rental 25 yrs. 27.5 yrs. MM S/L Federal Statements Complete Federal Statements for ROCK the Ages LLC. 2018 Federal Statements Page 1 Rock the Ages LLC 55-5555555 Statement 1 Form 1065, Line 20 Other Deductions Advertising 380,000 Insurance 52,000 Legal and Accounting 132,000 Meals. 100,000 Office Expense 200,000 Travel 320,000 Utilities 54,800 Total 1,238,800 Statement 2 Form 1065, Schedule K, Line 13a Charitable Contributions Cash Contributions - 60% Limitation. 28,000 Total 28,000 Statement 3 Form 1065, Schedule K, Line 20c Other Reportable Items Section 199A Qualified Business Income... 200,000 X Section 199A W-2 Wages. 1,000,000 Section 199A Unadjusted Basis 200,000 X Statement 4 Form 1065, Schedule L, Line 6 Other Current Assets Beginning Ending $ $ Marketable Securities .. 436,000 300,000 Total 436,000 300,000 Statement 5 Form 1065, Schedule L. Line 17 Other Current Liabilities Beginning Ending $ Line of Credit 200,000 160,000 Total 200,000 160,000 651118 Final K-1 Amended K-1 OMB No. 1545-0123 2018 Schedule K-1 (Form 1065) Department of the Treasury Internal Revenue Service Part III Partner's Share of Current Year Income, Deductions, Credits, and Other Items 1 Ordinary business income 15 Credits (loss) 244,800 For calendar year 2018, or tax year beginning / / 2018 ending 7 / 2 Net rental real estate income (loss) 3 Other net rental income (loss) 16 Foreign transactions A 4 Guaranteed payments 800,000 Partner's Share of Income, Deductions, Credits, etc. See separate instructions. Part I Information About the Partnership Partnership's employer identification number 55-5555555 Partnership's name, address, city, state, and ZIP code ROCK the Ages LLC 6102 Wilshire Boulevard Suite 2100 Los Angeles, CA 90036 IRS Center where partnership filed return e-file D. Check if this is a publicly traded partnership (PTP) B 5 Interest income 400 6a Ordinary dividends 6b Qualified dividends 6C Dividend equivalents Part II Information About the Partner 7 Royalties E Partner's identifying number 111-11-1112 8 Net short-term capital gain (loss) -5,000 17 Alternative minimum tax (AMT) items Partner's name, address, city, state, and ZIP code Ryan Ross 15520 West Earlson Street Pacific Palisades, CA 90272 General partner or LLC member. Limited partner or other LLC manager member Domestic partner Foreign partner 9a Net long-term capital gain (loss) 6,000 G 9b Collectibles (28%) gain (loss) H 9c Unrecaptured section 1250 11 18 Tax-exempt income and nendeductihla ananca What type of entity is this partner? Individual eturn Preparation Problem 2 Calculator 15520 West Earlson Street Pacific Palisades, CA 90272 9a Net long-term capital gain (loss) 6,000 V G General partner or LLC member- Limited partner or other LLC manager member 9b Collectibles (28%) gain (loss) H Domestic partner Foreign partner 9c Unrecaptured section 1250 gain 11 What type of entity is this partner? Individual 12 If this partner is a retirement plan (IRA/SEP/Keogh/etc.), check here 18 Tax-exempt income and nondeductible expenses 10 Net section 1231 gain (loss) 800 11 Other income (loss) C 25,000 Partner's share of profit, loss, and capital (see instructions): Beginning Ending Profit 25 % 25 % 12 Section 179 deduction 5,000 19 Distributions Loss 250,000 25 % 25 % Capital 25% 25 % 13 Other deductions 7,000 20 Other information A 400 K Partner's share of liabilities: AA 250,000 Beginning Ending $ AB 200,000 x Nonrecourse Qualified nonrecourse financing 200,000 X $ $ 14 Self-employment earnings (loss) 1,044,800 Recourse $ 50,000 $ 200,000 X L "See attached statement for additional information. Partner's capital account analysis: Beginning capital account ......... Capital contributed during the year $ 200,000 $ Current year increase (decrease)... $ 210,000 Withdrawals & distributions ........ $ 250,000 Ending capital account. $ 160,000 IPS Use Only Federal Stalament Complete Federal Statements for ROCK te Ages LLC 2018 Federal Statements Rock the Ages LLC Page 1 55-5555555 Statement 1 Form 1065, Line 20 Other Deductions 380,000 Turance 52,000 Legal and Accounting 132,000 100,000 Omo Bepense 200,000 320,000 tes 54,800 5 Total 1,238,800 Statement 2 Form 1065, Schedule K Line 13a Charitable Contributions Cash Contributions - 6046 Limitation 28.000 28,000 Statements Form 1065, Schedule K, Line 20 Other Reportable Items Section 1994 Qualified Business Income 200,000 X Section 1994 W-2 Wages Section 19 Unded Basis 1,000,000 200,000 x Statement 4 Form 1065, Schedule Line 6 Other Current Assets Ending Credo 111-11-1112 8 Net short-term captain 17 Alternative minimum tax (AMT) items -5,000 Partner's name, address, oty, state, and ZIP code Ryan Ross 15520 West Earlson Street Pacific Palisades, CA 90272 9 Netlong-term capital gain 6.000 General partner or LLC member. Umited partner or other LLC manager member Domestic partner Foreign partner 9b Collectibles (2845) gain() 90 Unrecaptured ction 1250 18 Txart income and mordeductible expenses What type of entity is this partner? Individual 10 A If this partner is a relirement plan (TRA/SE/Keog/etc.), check here Net section 1231 gainos) 800 11 Other income c 25,000 Partner's share of profit, loss, and capital (see instructions): Beginning Ending Prora 25 25 S 12 Section 179 deduction 5.000 19 Distributions A 250,000 25 25 13 other deductions A Capital) 25 25 7,000 20 Other information 400 y 44 250,000 Ending Partner's share of liabilities: Beginning Norcourse Qualified non course 5 200,000 X 9 N 14 Selemployment earnings 200,000 x 5 1,044.800 Recourse $ 50.000 200,000 x Se stached statement for sations information $ 200,000 Partner's capital account analysis: Beginning capital account Capital contributed during the year Current year increase (decrease) 5 3 210,000 Wearanas 3., $ 250.000 Ending capital count $ 160.000 For Use Only Section 704[b) book Tex basis - Other (explain) Yes M Did the partner contribute property with a built-in gain or loss No If "Yes," attach statement (see instructions) BAA For Paperwork Reduction Act Notice, see Instructions for Form 1065 Schedule K-1 (Form 1065) 2019 turn Preparation Problem 2 Calculator Form 1065 Ja. Prepare the 2018 Form 1065, pages 1, 4, and 5, for ROCK the Ages LLC using tax basis information for Schedules L and M-2. If required, use the minus sign to indicate a loss. Form 1065 U.S. Return of Partnership Income OMB No. 1545-0123 Department of the For calendar year 2018, or tax year beginning ___ 2018, ending 20 Treasury Internal Go www.irs.gov/Form 1065 for instructions and the latest information. 2018 Revenue Service A Principal business activity D Employer identification no Musician Agents 55-5555555 Type ROCK the Ages LLC B Principal product or service E Date business started or Agent Services 6102 Wilshire Boulevard Suite 2100 1/01/2006 Print Los Angeles, CA 90036 C Business code number F Total assets (see instructions) 711410 $ 800,000 Check applicable boxes: (1) Initial (2) Final (3) Name change (4) Address (5) Amended return return change return HCheck accounting method: (1) Cash (2) Accrual (3) Other (specify) I Number of Schedules K-1. Attach one for each person who was a partner at any time during the tax year 4 Check if Schedules and M-3 are attached Caution: Include only trade or business income and expenses on lines ia through 22 below. See the instructions for more information. 1a Gross receipts or sales la 4,800,000 b Returns and allowances 1b c Balance. Subtract line 1b from line la... 1c 4,800,000 2 3 4,800,000 V Income 4 2 Cost of goods sold (attach Form 1125-A) 3 Gross profit. Subtract line 2 from line 10. 4 Ordinary income (loss) from other partnerships, estates, and trusts (attach statement) 5 Net farm profit (loss) (attach Schedule F (Form 1040))....... 6 Net gain (loss) from Form 4797, Part II, line 17 (attach Form 4797) 7 Other income (loss) (attach statement) 8 Total income (loss). Combine lines 3 through 7. 5 6 7 4,800,000 9 Salaries and wages (other than to partners) (less employment credits) 9 1,000,000 V v2.cengagenow.com/ilrn/take Assignment/takeAssignmentMain.do?invoker=&take AssignmentSess n Preparation Problem 2 Calculator 9 Salaries and wages (other than to partners) (less employment credits) 9 1,000,000 10 Guaranteed payments to partners... 10 1,400,000 11 11 Repairs and maintenance 12 Bad debts 12 13 Rent ...... 13 80,000 Deductions see the instructions for limitations) 14 Taxes and licenses 14 92,000 15 16b 160 17 18 19 21 22 15 Interest (see instructions).. 10,000 16a Depreciation (if required, attach Form 4562) 16a b Less depreciation reported on Form 1125-A and elsewhere on return 17 Depletion (Do not deduct oil and gas depletion.) 18 Retirement plans, etc. 19 Employee benefit programs. 20 Other deductions (attach statement) 20 1,238,800 21 Total deductions. Add the amounts shown in the far right column for lines 9 through 20 3,820,800 22 Ordinary business income (loss). Subtract line 21 from line 8 979,200 23 Interest due under the look back method-completed long-term contracts (attach Form 8697)... 24 Interest due under the look back method-income forecast method (attach Form 8866). 25 BBA AAR imputed underpayment (see instructions).. 26 Other taxes (see instructions). 27 Total balance due. Add lines 23 through 26 27 28 Payment (see instructions)....... 29 Amount owed. If line 28 is smaller than line 27, enter amount owed 30 Overpayment. If line 28 is larger than line 27, enter overpayment. 30 Sign 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 Here liability company member) is based on all information of which preparer has any knowledge. 23 24 Tax and Payments 25 26 28 29 May the IRS discuss this return with the preparer shown below? See instructions. Yes No Signature of partner or limited liability company member Date Preparation Problem 2 Calculator 55-5555555 Page 4 Form 1065 (2018) ROCK the Ages LLC Schedule K Partners' Distributive Share Items Total amount 1 Ordinary business income (loss) (page 1, line 22). 1 979,200 2 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 3b 30 4 Guaranteed payments. 1,400,000 5 Interest income ... 5 1,600 6 Dividends and dividend equivalents: Income (Loss) a Ordinary dividends. b Qualified dividends Dividend equivalents 6b c 60 7 7 Royalties 3 Net short-term capital gain (loss) (attach Schedule D (Form 1065)) 8 -20,000 9a 24,000 9b 9c 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). 10 11 12 20,000 13a Contributions .. 13a 2
