Amy and Mitchell share equally (50%) in the profits, losses, and capital of the accrual basis AM Products LLC. 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 year, Amy's tax basis capital account has a balance of $300,000, and the LLC has debts of $200,000 payable to unrelated parties. All debts are recourse to the LLC, but neither of the LLC members has personally guaranteed them. The following information about AM's operations for the current year is obtained from the LLC's records. Sales revenues Other "ordinary and necessary" operating expenses (e.g., utilities, repairs, and rent) W-2 wages to employees Depreciation expense Interest income Long-term capital gain Charitable contribution (cash) Cash distribution to Amy Unadjusted basis of partnership property immediately after acquisition $1,400,000 500,000 200,000 300,000 4,000 6,000 4,000 20,000 1,600,000 Year-end LLC debt payable to unrelated parties is $140,000. Assume that all transactions are reflected in her beginning capital and basis in the same manner. All AM Products' activities are eligible for the qualified business income deduction.

Amy and Mitchell share equally (50%) in the profits, losses, and capital of the accrual basis AM Products LLC. 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 year, Amy's tax basis capital account has a balance of $300,000, and the LLC has debts of $200,000 payable to unrelated parties. All debts are recourse to the LLC, but neither of the LLC members has personally guaranteed them. The following information about AM's operations for the current year is obtained from the LLC's records. Sales revenues Other "ordinary and necessary" operating expenses (e.g., utilities, repairs, and rent) W-2 wages to employees Depreciation expense Interest income Long-term capital gain Charitable contribution (cash) Cash distribution to Amy Unadjusted basis of partnership property immediately after acquisition $1,400,000 500,000 200,000 300,000 4,000 6,000 4,000 20,000 1,600,000 Year-end LLC debt payable to unrelated parties is $140,000. Assume that all transactions are reflected in her beginning capital and basis in the same manner. All AM Products' activities are eligible for the qualified business income deduction.

SWFT Essntl Tax Individ/Bus Entities 2020

23rd Edition

ISBN:9780357391266

Author:Nellen

Publisher:Nellen

Chapter14: Partnerships And Limited Liability Entities

Section: Chapter Questions

Problem 16P

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