and Mitchell share equally (50%) in the profits, losses, and capital of the accrual basis AM Products LLC. Amy is a managing member LLC (treated as a general partner) and is a U.S. person. e beginning of the current year, Amy's tax basis capital account has a balance of $768,000, and the LLC has debts of $499,200 payable related parties. All debts are recourse to the LLC, but neither of the LLC members has personally guaranteed them. The following mation about AM's operations for the current year is obtained from the LLC's records. erating income" -2 wages preciation expense terest income ng-term capital loss ng-term capital gain. maritable contribution (cash) ash distribution to Amy madjusted basis of partnership property mediately after acquisition $1,152,000 200,000 300,000 11,520 7,680 23,040 11,570 57,600 1,600,000 perating income equals revenue less operating expenses (other than expenses listed separately above). -end LLC debt payable to unrelated parties is $349,440. Assume that all transactions are reflected in her beginning capital and basis in same manner. Also assume that all AM Products' activities are eligible for the qualified business income deduction. Calculate Amy's basis in her LLC interest at the beginning and end of the tax year. Use her capital account as a starting point. Cinterest at the beginning of the year: 1,017,600✔ Cinterest at the end of the year: 174,720 X
and Mitchell share equally (50%) in the profits, losses, and capital of the accrual basis AM Products LLC. Amy is a managing member LLC (treated as a general partner) and is a U.S. person. e beginning of the current year, Amy's tax basis capital account has a balance of $768,000, and the LLC has debts of $499,200 payable related parties. All debts are recourse to the LLC, but neither of the LLC members has personally guaranteed them. The following mation about AM's operations for the current year is obtained from the LLC's records. erating income" -2 wages preciation expense terest income ng-term capital loss ng-term capital gain. maritable contribution (cash) ash distribution to Amy madjusted basis of partnership property mediately after acquisition $1,152,000 200,000 300,000 11,520 7,680 23,040 11,570 57,600 1,600,000 perating income equals revenue less operating expenses (other than expenses listed separately above). -end LLC debt payable to unrelated parties is $349,440. Assume that all transactions are reflected in her beginning capital and basis in same manner. Also assume that all AM Products' activities are eligible for the qualified business income deduction. Calculate Amy's basis in her LLC interest at the beginning and end of the tax year. Use her capital account as a starting point. Cinterest at the beginning of the year: 1,017,600✔ Cinterest at the end of the year: 174,720 X
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Subject : Accounting
Transcribed Image Text:Problem 21-35 (Algorithmic) (LO. 6, 7, 9, 10)
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 $768,000, and the LLC has debts of $499,200 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.
Operating income"
W-2 wages
Depreciation expense
Interest income
Long-term capital loss
Long-term capital gain.
Charitable contribution (cash)
Cash distribution to Amy
Unadjusted basis of partnership property
immediately after acquisition
$1,152,000
200,000
300,000
11,520
7,680
23,040
11,570
57,600
1,600,000
Operating income equals revenue less operating expenses (other than expenses listed separately above).
Year-end LLC debt payable to unrelated parties is $349,440. Assume that all transactions are reflected in her beginning capital and basis in
the same manner. Also assume that all AM Products' activities are eligible for the qualified business income deduction.
a. Calculate Amy's basis in her LLC interest at the beginning and end of the tax year. Use her capital account as a starting point.
LLC interest at the beginning of the year:: 1,017,600 ✓
LLC interest at the end of the year:
174,720 X.
Transcribed Image Text:b. What income, gains, losses, and deductions does Amy report on her income tax return?
If an amount is zero, enter "0".
Ordinary income
Net long-term capital gain
Interest income
Charitable contribution deduction
Cash distribution
31000
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