Aaron, Deanne, and Keon formed the Blue Bell General Partnership at the beginning of the current year. Aaron and Deanne each contributed $110,000, and Keon transferred an acre of undeveloped land to the partnership. The land had a tax basis of $70,000 and was appraised at $180,000. The land was also encumbered with a $70,000 nonrecourse mortgage for which no one was personally liable. All three partners agreed to split profits and losses equally. At the end of the first year, Blue Bell made a $7,000 principal payment on the mortgage. For the first year of operations, the partnership records disclosed the following information: Sales revenue Cost of goods sold Operating expenses Long-term capital gains §1231 gains Charitable contributions Municipal bond interest Salary paid as a guaranteed payment to Deanne (not included in expenses) $ 470,000 410,000 70,000 2,400 900 300 300 3,000 c. Using the information generated in answering parts (a) and (b). prepare Blue Bell's page 1 and Schedule K to be included with its Form 1065 for its first year of operations, along with Schedule K-1 for Deanne.
Aaron, Deanne, and Keon formed the Blue Bell General Partnership at the beginning of the current year. Aaron and Deanne each contributed $110,000, and Keon transferred an acre of undeveloped land to the partnership. The land had a tax basis of $70,000 and was appraised at $180,000. The land was also encumbered with a $70,000 nonrecourse mortgage for which no one was personally liable. All three partners agreed to split profits and losses equally. At the end of the first year, Blue Bell made a $7,000 principal payment on the mortgage. For the first year of operations, the partnership records disclosed the following information: Sales revenue Cost of goods sold Operating expenses Long-term capital gains §1231 gains Charitable contributions Municipal bond interest Salary paid as a guaranteed payment to Deanne (not included in expenses) $ 470,000 410,000 70,000 2,400 900 300 300 3,000 c. Using the information generated in answering parts (a) and (b). prepare Blue Bell's page 1 and Schedule K to be included with its Form 1065 for its first year of operations, along with Schedule K-1 for Deanne.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Use 2022 tax rules
![Aaron, Deanne, and Keon formed the Blue Bell General Partnership at the beginning of the current year. Aaron and
Deanne each contributed $110,000, and Keon transferred an acre of undeveloped land to the partnership. The land had a
tax basis of $70,000 and was appraised at $180,000. The land was also encumbered with a $70,000 nonrecourse
mortgage for which no one was personally liable. All three partners agreed to split profits and losses equally. At the end of
the first year, Blue Bell made a $7,000 principal payment on the mortgage. For the first year of operations, the partnership
records disclosed the following information:
Sales revenue
Cost of goods sold
Operating expenses
Long-term capital gains
§1231 gains
Charitable contributions
Municipal bond interest
Salary paid as a guaranteed payment to Deanne (not
included in expenses)
$ 470,000
410,000
70,000
2,400
900
300
300
3,000
c. Using the information generated in answering parts (a) and (b). prepare Blue Bell's page 1 and Schedule K to be included with its
Form 1065 for its first year of operations, along with Schedule K-1 for Deanne.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F42077dd4-5a93-4885-bc7c-dca1203ecd7a%2F3d983c83-f16b-4753-9f67-b4eeff59fb64%2Fooodslg_processed.png&w=3840&q=75)
Transcribed Image Text:Aaron, Deanne, and Keon formed the Blue Bell General Partnership at the beginning of the current year. Aaron and
Deanne each contributed $110,000, and Keon transferred an acre of undeveloped land to the partnership. The land had a
tax basis of $70,000 and was appraised at $180,000. The land was also encumbered with a $70,000 nonrecourse
mortgage for which no one was personally liable. All three partners agreed to split profits and losses equally. At the end of
the first year, Blue Bell made a $7,000 principal payment on the mortgage. For the first year of operations, the partnership
records disclosed the following information:
Sales revenue
Cost of goods sold
Operating expenses
Long-term capital gains
§1231 gains
Charitable contributions
Municipal bond interest
Salary paid as a guaranteed payment to Deanne (not
included in expenses)
$ 470,000
410,000
70,000
2,400
900
300
300
3,000
c. Using the information generated in answering parts (a) and (b). prepare Blue Bell's page 1 and Schedule K to be included with its
Form 1065 for its first year of operations, along with Schedule K-1 for Deanne.
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