K L Check if decrease is due to sale or exchange of partnership interest D Partner's share of liabilities: Nonrecourse Qualified nonrecourse financing Recourse $ $ Beginning 172,900 ✔ $ $ Check this box if Item K includes liability amounts from lower tier partnerships. Beginning capital account...... $ Capital contributed during the year. . Current year net income (loss). . . . . Other increase (decrease) (attach explanation) $ $ Partner's capital account analysis: $ $ Ending 121,030 ✓ $ 532,000 29,800 X 12 Section 179 deduction 13 Other deductions A 14 Self-employment earnings A 4,015 ✔ (loss) 149,000 20 Other information A Z* STMT QBI W-2 wages UBIA 29,800 X 149,000 100,000 800,000 ✓ 21 More than one activity for at-risk purposes* 22 More than one activity for passive activity purposes* *See attached statement for additional information.
K L Check if decrease is due to sale or exchange of partnership interest D Partner's share of liabilities: Nonrecourse Qualified nonrecourse financing Recourse $ $ Beginning 172,900 ✔ $ $ Check this box if Item K includes liability amounts from lower tier partnerships. Beginning capital account...... $ Capital contributed during the year. . Current year net income (loss). . . . . Other increase (decrease) (attach explanation) $ $ Partner's capital account analysis: $ $ Ending 121,030 ✓ $ 532,000 29,800 X 12 Section 179 deduction 13 Other deductions A 14 Self-employment earnings A 4,015 ✔ (loss) 149,000 20 Other information A Z* STMT QBI W-2 wages UBIA 29,800 X 149,000 100,000 800,000 ✓ 21 More than one activity for at-risk purposes* 22 More than one activity for passive activity purposes* *See attached statement for additional information.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
I need help where the two red x's are. Please and thank you!
![Amy and Mitchell share equally in the profits, losses, and capital of the accrual basis AM Products LLC. The LLC does not need to report
financial information to any third parties, so capital accounts are determined using tax rules (rather than GAAP). 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 $532,000, and the LLC has debts of $345,800 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.
Operating income*
$798,000
W-2 wages
200,000
Depreciation expense
300,000
Interest income
7,980
Long-term capital loss
5,320
Long-term capital gain
15,960
Charitable contribution (cash)
8,030
Cash distribution to Amy
39,900
Unadjusted basis of partnership
depreciable property immediately after
1,600,000
acquisition](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Ff346e890-2b38-4131-a03e-045ada1a3c22%2F86956663-f70c-45b6-89f3-5e319b6fd26e%2Fv4m2ai5_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Amy and Mitchell share equally in the profits, losses, and capital of the accrual basis AM Products LLC. The LLC does not need to report
financial information to any third parties, so capital accounts are determined using tax rules (rather than GAAP). 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 $532,000, and the LLC has debts of $345,800 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.
Operating income*
$798,000
W-2 wages
200,000
Depreciation expense
300,000
Interest income
7,980
Long-term capital loss
5,320
Long-term capital gain
15,960
Charitable contribution (cash)
8,030
Cash distribution to Amy
39,900
Unadjusted basis of partnership
depreciable property immediately after
1,600,000
acquisition
![Check if decrease is due to sale or exchange of partnership
12 Section 179 deduction
20 Other information
A
interest o
29,800 x
13 Other deductions
Z*
STMT
K
Partner's share of liabilities:
A
4,015
QBI
149,000 V
Beginning
Ending
W-2 wages
Nonrecourse
$
172,900 V $
121,030
100,000 V
Qualified
2$
2$
UBIA
nonrecourse
financing
800,000 V
Recourse
$
2$
O Check this box if Item K includes liability amounts from lower
14 Self-employment earnings
tier partnerships.
(loss)
A
149,000 V
L
Partner's capital account analysis:
Beginning capital account......
532,000 V
21 O More than one activity for at-risk purposes*
Capital contributed during the year. .
$
22 O More than one activity for passive activity purposes*
Current year net income (loss).....
29,800 x
2$
*See attached statement for additional information.
Other increase (decrease) (attach
explanation)](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Ff346e890-2b38-4131-a03e-045ada1a3c22%2F86956663-f70c-45b6-89f3-5e319b6fd26e%2F8ifzjt_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Check if decrease is due to sale or exchange of partnership
12 Section 179 deduction
20 Other information
A
interest o
29,800 x
13 Other deductions
Z*
STMT
K
Partner's share of liabilities:
A
4,015
QBI
149,000 V
Beginning
Ending
W-2 wages
Nonrecourse
$
172,900 V $
121,030
100,000 V
Qualified
2$
2$
UBIA
nonrecourse
financing
800,000 V
Recourse
$
2$
O Check this box if Item K includes liability amounts from lower
14 Self-employment earnings
tier partnerships.
(loss)
A
149,000 V
L
Partner's capital account analysis:
Beginning capital account......
532,000 V
21 O More than one activity for at-risk purposes*
Capital contributed during the year. .
$
22 O More than one activity for passive activity purposes*
Current year net income (loss).....
29,800 x
2$
*See attached statement for additional information.
Other increase (decrease) (attach
explanation)
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