Carlyle, LLC is a partnership with 4 partners. Each has an equal 25% interest. The partnership’s balance sheet at the beginning of the year is posted below. Assume all partnership assets were purchased by the partnership (i.e., there is no sec. 704(c) contributed property). During the current year, the partnership had the following transactions: Description Amount Gross receipts $568,750 Cost of goods sold $253,750 Salaries $70,000 Sale of computer equipment on Jan. 1 of the current year (computer equipment was originally purchased by Carlyle, LLC two years ago for $70,000. Accumulated depreciation = $28,000. No depreciation on the equipment is permitted in the current year). Sales Price = $65,625 cash Sale of Ranch Sales Price = $122,500 cash + Buyer’s assumption of the mortgage Carlyle, LLC Tax Balance Sheet (Beginning of year) Book Tax Book Tax Comp. Equipment 42,000 42,000 Mortgage 35,000 35,000 Cash 211,750 211,750 Inventory 131,250 131,250 Rhiannon 122,500 122,500 Ranch 140,000 140,000 Tanner 122,500 122,500 Jim 122,500 122,500 Darius 122,500 122,500 What amount will appear in Box 1 (“Ordinary Business Income”) of Rhiannon’s K-1 for the current year? Does the partnership have any separately stated items? If so, what? What is Rhiannon’s share? What is Rhiannon’s tax capital account at the end of the year?
Carlyle, LLC is a
During the current year, the partnership had the following transactions:
|
Description |
Amount |
|
Gross receipts |
$568,750 |
|
Cost of goods sold |
$253,750 |
|
Salaries |
$70,000 |
|
Sale of computer equipment on Jan. 1 of the current year (computer equipment was originally purchased by Carlyle, LLC two years ago for $70,000. Accumulated |
Sales Price = $65,625 cash |
|
Sale of Ranch |
Sales Price = $122,500 cash + Buyer’s assumption of the mortgage |
|
Carlyle, LLC Tax Balance Sheet (Beginning of year) |
||||||
|
|
Book |
Tax |
|
|
Book |
Tax |
|
Comp. Equipment |
42,000 |
42,000 |
|
Mortgage |
35,000 |
35,000 |
|
Cash |
211,750 |
211,750 |
|
|
|
|
|
Inventory |
131,250 |
131,250 |
|
Rhiannon |
122,500 |
122,500 |
|
Ranch |
140,000 |
140,000 |
|
Tanner |
122,500 |
122,500 |
|
|
|
|
|
Jim |
122,500 |
122,500 |
|
|
|
|
|
Darius |
122,500 |
122,500 |
- What amount will appear in Box 1 (“Ordinary Business Income”) of Rhiannon’s K-1 for the current year?
- Does the partnership have any separately stated items? If so, what? What is Rhiannon’s share?
- What is Rhiannon’s tax capital account at the end of the year?
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