The below information must be used to complete forms links below
Sales revenue $3,000,000
Cost of Sales $750,000
W2 wages paid to employees $1,050,000
Cost recovery deductions $103,125
Utilities, supplies, and other business expenses $158,000
Taxes and licenses (including payroll) $ 150,000
Guaranteed payments to LLC members $240,000
Charitable contributions $15,000
Short-term capital gain $14,000
Net income from rental real estate (net of all expenses, including depreciation on rental property $200,000
Qualified dividends received $5,000
Exempt income (bond interest) $10,000
Alternative minimum tax adjustment cost recovery $ 50,000
Oliver Williams, Dwight Whittington, and Natalie Maloney started an accounting firm located 123 Forest Drive, Myrtle Beach, South Carolina 29538 named Accounting Consultants, Inc. The biz started January 1, 2019 and has 12-3456789 as its Employer Identification Number (EIN). They want to structure their org as a partnership.
-accrual method. Oliver Williams is the manager and the only accountant of the firm and works 40 hours per week completing accounting duties. Natalie Maloney works as the marketing director and works 20 hours at the office location and 20 hours outside of the office (in the field) maintaining and generating customers. Dwight Whittington and Natalie Maloney each contributed $100,000 in year 1.
Oliver and Natalie both receive guaranteed payments of $5,000 each month for their services to the LLC. Natalie and Dwight both receive $5,000 guaranteed per month for their use of capital. All revenues and expenses are allocated in the expected 25%/50%/25% ratios to Oliver, Natalie, and Dwight, respectively. Address the following questions for the partnership based on the information in this problem as well as the above data table:
- Part I
- In 4-6, address the following:
- What is the partnership classification of each partner?
- What is a partnership agreement, and how does it apply to this partnership?
- Describe what tax forms must be filed for partnerships.
- What are the tax implications of this partnership? Explain your answer.
- Part II
- Complete the Form 1065 (page 1 and Schedule K-1) for this partnership.——-https://resources.careered.com/LCMSFileSharePrevie…
- Complete the Schedule K-1 using the form provided to Natalie Maloney. ——-https://resources.careered.com/LCMSFileSharePrevie…
reference
South-Western Federal Taxation 2021:
Corporations, Partnerships, Estates and Trusts.
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