Amy and Mitchell share equally 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 tax year, Amy's capital account has a balance of $300,000, and the LLC has debts of $200,000 payable to unrelated parties. The debts are recourse to the LLC, but neither of the LLC members has personally guaranteed them. Assume that all LLC debt is shared equally between the partners. The following information about AM's operations for the current year is obtained from the LLC's records. Ordinary income W-2 wages to employees Depreciation expense Interest income Short-term capital loss Long-term capital gain Charitable contribution (cash) Cash distribution to Amy Unadjusted basis of partnership depreciable property $900,000 200,000 300,000 4,000 6,000 12,000 4,000 20,000 1,600,000 Year-end LLC debt payable to unrelated parties is $140,000. If all transactions are reflected in her beginning capital and basis in the same manner.
Amy and Mitchell share equally 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 tax year, Amy's capital account has a balance of $300,000, and the LLC has debts of $200,000 payable to unrelated parties. The debts are recourse to the LLC, but neither of the LLC members has personally guaranteed them. Assume that all LLC debt is shared equally between the partners. The following information about AM's operations for the current year is obtained from the LLC's records. Ordinary income W-2 wages to employees Depreciation expense Interest income Short-term capital loss Long-term capital gain Charitable contribution (cash) Cash distribution to Amy Unadjusted basis of partnership depreciable property $900,000 200,000 300,000 4,000 6,000 12,000 4,000 20,000 1,600,000 Year-end LLC debt payable to unrelated parties is $140,000. If all transactions are reflected in her beginning capital and basis in the same manner.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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D2.
Account
Transcribed Image Text:Prepare Amy's capital account rollforward from the beginning to the end of the tax year.
Capital account balance, beginning year
Ordinary income
Interest income
Net long-term capital gain
Less:
Charitable contribution
Cash distribution to Amy
Capital account balance, end of year
Amy's capital account differs from her basis only by the amount of her share of LLC
Transcribed Image Text:Problem 10-48 (LO. 11)
Amy and Mitchell share equally 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 tax year, Amy's capital account has a balance of
$300,000, and the LLC has debts of $200,000 payable to unrelated parties. The debts are recourse to the LLC, but neither of the LLC
members has personally guaranteed them. Assume that all LLC debt is shared equally between the partners. The following information
about AM's operations for the current year is obtained from the LLC's records.
Ordinary income
W-2 wages to employees
Depreciation expense
Interest income
Short-term capital loss
Long-term capital gain
Charitable contribution (cash)
Cash distribution to Amy
Unadjusted basis of partnership depreciable property
$900,000
200,000
300,000
4,000
6,000
12,000
4,000
20,000
1,600,000
Year-end LLC debt payable to unrelated parties is $140,000. If all transactions are reflected in her beginning capital and basis in the same
manner.
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