SHOW ALL WORK TO COME UP WITH CALCULATION FOR FORM 1065 PAGE 1 LINE 22 "Ordinary Business Income/ Loss"

FACTS:

Alyssa and Brandon and Curtis are active members of the ABC, LLC. Per the LLC agreement, Alyssa has a 50% interest, Brandon has 30% and Curtis has 20%. The company is a calendar year, accrual basis taxpayer. The companys 2015 income statement prepared in accordance with GAAP is presented below:

Revenues
Service Income	$1,100,000
Expenses
Salaries, wages and guaranteed payments	$350,000	[ 1]
Taxes	20,000	[ 2]
Contributions to charity	40,000
Depreciation	50,000	[ 3]
Repairs and maintenance	112,000
Travel and entertainment	55,000	[ 4]
Legal and accounting	60,000
Total	$687,000
Net income before other items	$413,000
Long term capital loss	-10,000
Dividend income (All qualified)	20,000
Interest income	18,000	[ 5]
Net income	$441,000

The following additional information is provided:

[ 1] Wages to employees $ 200,000

Guaranteed payment to Alyssa 50,000

Guaranteed payment to Brandon 100,000

Guaranteed payment to Curtis 0

Total $ 350,000

[ 2] Taxes consist of:

Payroll taxes $ 18,000

Penalty for late payment of taxes 2,000

Total $ 20,000

[3] Depreciation per books is straightline. For tax purposes, MACRS depreciation, not including section 179 expense, amounted to $65,000. Recomputed for AMT (using ADS) depreciation was $55,000. All asset were placed in service after 1986.

Section 179 expense was $10,000 (no AMT adjustment for this).

[ 4] Meals and entertainment included in this number total $10,000.

[ 5] Interest revenue consists of interest on:

Corporate bonds $15,000 Municipal bonds $3,000

Additional information:

Beginning capital account balances per books (GAAP) were:

Alyssa $150,000, Brandon $ 90,000, Curtis $ 5,000

Distributions (not including guaranteed payments) were $10,000 to each partner.

Self employment income (schedule K line 14) includes net profit from operations (on a tax basis). Do not include interest, dividends, capital loss or charity in the calculation but add guaranteed payment income for the specific partner. Section 179 is also subtracted to arrive at Net Earnings from Self Employment.

The ending balance sheet showed $20,000 in short term accounts payable and $200,000 in long term mortgages payable. (full recourse)

Alyssa has a beginning of year basis in her interest of $400,000 and her share of liabilities at the beginning of the year was $150,000.