Timothy Gates and Prada Singh decide to form a new company, TGPS LLC (a multimember LLC that will report its operations as apartnership). Timothy is married, and Prada is single. Each contributes $400,000 of capital to begin the business, and both materiallyparticipate in the business. In 2023, TGPS reports a net loss of $610,000. What are the implications of this loss for Timothy and Prada?If an amount is zero, enter "0".Timothy has an excess business loss of $loss to offset nonbusiness income0. He may use !305,000 of his share of the $610,000 LLC business✓.Prada has an excess business loss of $28,000 X. She may use $262,000 X of her share of the $610,000 LLC businessloss to offset nonbusiness incomeAny excess business loss is treated as part of the taxpayer's NOL carryforward✓.

LLC stands for Limited Liability Company. As the name suggests, it is a partnership firm that limits…

Answered: Timothy Gates and Prada Singh decide to…

Timothy Gates and Prada Singh decide to form a new company, TGF partnership). Timothy is married, and Prada is single. Each contribu

SWFT Comprehensive Vol 2020

43rd Edition

ISBN:9780357391723

Author:Maloney

Publisher:Maloney

Chapter7: Deductions And Losses: Certain Business Expenses And Losses

Section: Chapter Questions

Problem 38P

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n the early part of 2024, the partners of Hugh, Jacobs, and Thomas sought assistance from a local accountant. They had begun a new business in 2023 but had never used an accountant's services. Hugh and Jacobs began the partnership by contributing $125,000 and $55,000 in cash, respectively. Hugh was to work occasionally at the business, and Jacobs was to be employed full-time. They decided that year-end profits and losses should be assigned as Follows: Each partner was to be allocated 10 percent interest computed on the beginning capital balances for the period. A compensation allowance of $7,000 was to go to Hugh with a $19,000 amount assigned to Jacobs. • Any remaining income would be split on a 4:6 basis to Hugh and Jacobs, respectively. n 2023, revenues totaled $130,000, and expenses were $96,000 (not including the partners' compensation allowance). Hugh withdrew cash of $6,000 during the year, and Jacobs took out $11,000. In addition, the business paid $9,000 for repairs made to…
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