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

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: Sandy and Dave formed a law partnership, agreeing to split the income 50:50. The partnership had net…

A: Answer Given that profit sharing ratio of sandy and Dave is 50 : 50 ( equal share ) During the year…

Q: Jake, Sacha, and Brianne own a tour company called Adventure Sports. The partners share profit and…

A: Introduction:Partnership can be of two types one is limited liability partnership another is…

Q: What is Maria's and Javier's qualified business income? $ b. What is Maria's and Javier's…

Q: Jesse and Tim form a partnership by combining the assets of their separate businesses. Jesse…

A: When two or more people come together to run a business is called partnership firm. The partners…

Q: Meir, Benson, and Lau are partners and share income and loss in a ratio (in percents: Meir, 20%;…

A: INTRODUCTION:An agreement between partners in a company that specifies the terms and circumstances…

Q: The TimpRiders LP has operated a motorcycle dealership for a number of years. Amir is the limited…

A: Amir and Francesca operate a motorcycle dealership under the TimpRiders LP, where Amir is the…

Q: Karla retires from Orton Associates, a partnership. The business is continued by the remaining…

A: A partnership agreement is one where two or more people come together to operate a business. The…

Q: In the LMK partnership, Luis's capital is $40,900, Marty's is $51,900, and Karl's is $30,500. They…

A: A partnership is a type of business where a formal agreement between two or more people is made who…

Q: Kraft is a limited partner of Johnson Enterprises, a limited partnership. As provided in the limited…

A: (a) Johnson Enterprises is a limited partnership firm. She is only liable for the amount that she…

Q: am wants to help his brother, Lou, start a new business. Lou is an auto mechanic but has little…

A: Partnership refers to an arrangement of business which involves two or more parties also known as…

Q: Kelly, Lars, and Mona agreed to be partners in Neighborhood Deliveries ( ND), all splitting the…

A: Partnership -A partnership is a type of corporate structure in which two or more individuals…

Q: Matt is withdrawing from the partnership of Matt, Lee, and Karla. The partners share profits and…

A: The partnership comes into existence when two or more persons agree to do the business and share…

Q: Jesse and Tim form a partnership by combining the assets of their separate businesses. Jesse…

A: Partnership is the relation between two or more person, It has the following characteristicsThey…

Q: Jesse and Tim form a partnership by combining the assets of their separate businesses. Jesse…

A: An agreement under which two or more partners share profit or losses in an agreed ratio refers to…

Q: All of the following are examples of partnerships EXCEPT: (a) Brian and his friend Manuel formed a…

A: Partnership is the type of business in which two or more person works together to achieve the common…

Q: The partner equity balances are Jack, Capital 30000,Current 90000; Bob, Capital 35000, Current…

A: Lets understand the basics. In partnership, partners accounts divided into two types. (1) Capital…

Q: Mike and Melissa form the equal MM Partnership. Mike contributes cash of $40,000 and land (fair…

A: 1). Alternative 1:-The loss of $ 36000 will be recognized in 6 years after the sale of land. Loss is…

Q: Martin, Mark, and Marvin formed a retail clothing partnership named M Clothiers and conducted a…

A: Case summary: MA, MR, and MV were partners of a clothing store. MV retired and the same was…

Q: Ted, Will, Mike, and Tom own a 20-room home as tenants in common. Mike and Tom, two of the owners,…

A: The question is asking whether Mike and Tom, who are part of a tenancy in common, can legally sell…

Q: Adams, a consulting engineer, entered into a partnership with three others for the practice of their…

A: Disclaimer: “Since you have posted a question with multiple sub-parts, we will solve first three…

Q: Bobbi and Stuart are partners. The partnership capital of Bobbi is $50,000 and that of Stuart is…

A: The objective of the question is to determine the journal entry for the admission of John as a new…

Q: Kimberly Payne and Arionna Maples decide to form a partnership by combining the assets of their…

Q: Jake, Sacha, and Brianne own a tour company called Adventure Sports. The partners share profit and…

A: Partnership can be of two types one is limited liability partnership another is unlimited or general…

Q: not use ai please

A: To determine how David's admission to the partnership should be recorded, we need to consider the…

Question

Timothy Gates and Prada Singh decide to form a new company, TGPS LLC (a multimember LLC that will report its operations as a
partnership). Timothy is married, and Prada is single. Each contributes $400,000 of capital to begin the business, and both materially
participate 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 income
0. 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 business
loss to offset nonbusiness income
Any excess business loss is treated as part of the taxpayer's NOL carryforward
✓.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1: Meaning of LLC:

VIEW

Step 2: Computation of excess business loss for Prada:

VIEW

Solution

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 3 steps with 2 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

Horatio and Calleigh are partners in a private investigations firm. Each partner's outside basis in the partnership will generally equal their: Tax capital account plus their share of recourse liabilities. Tax capital account plus their share of liabilities. Book capital account plus their share of recourse liabilities. Book capital account plus their share of liabilities.
Jesse and Tim form a partnership by combining the assets of their separate businesses. Jesse contributes accounts receivable with a face amount of $46,000 and equipment with a cost of $181,000 and accumulated depreciation of $105,000. The partners agree that the equipment is to be valued at $67,900, that $3,000 of the accounts receivable are completely worthless and are not to be accepted by the partnership, and that $2,200 is a reasonable allowance for the uncollectibility of the remaining accounts receivable. Tim contributes cash of $21,500 and merchandise inventory of $45,000. The partners agree that the merchandise inventory is to be valued at $48,500. Journalize the entries to record in the partnership accounts (a) Jesse's investment and (b) Tim's investment. If an amount box does not require an entry,
Jay
Fluffy, Anjelah, and Lopez are partners and share income and losses as follows: Fluffy, 20%; Anjelah, 30%; and Lopez, 50%. The partnership’s capital balances follow: Fluffy, $330; Anjelah, $270; and Lopez, $400. Lopez decides to withdraw from the partnership. Prepare journal entries to record Lopez’s May 1 withdrawal from the partnership under each separate assumption: a. Lopez sells his interest to Mencia for $500 after Mencia is accepted as a partner. b. Lopez gives his interest to a son-in-law, Madrigal, and Madrigal is accepted as a partner. c. Lopez is paid $400 in partnership cash for his equity. d. Lopez is paid $600 in partnership cash for his equity. e. Lopez is paid $70 in partnership cash plus equipment recorded on the partnership books at $40 less its accumulated depreciation of $10.
Vishal
Steve Reese is a well-known interior designer in Fort Worth, Texas. He wants to start his own business and convinces Rob O’Donnell, a local merchant, to contribute the capital to form a partnership. On January 1, 2019, O’Donnell invests a building worth $74,000 and equipment valued at $44,000 as well as $32,000 in cash. Although Reese makes no tangible contribution to the partnership, he will operate the business and be an equal partner in the beginning capital balances. To entice O’Donnell to join this partnership, Reese draws up the following profit and loss agreement: O’Donnell will be credited annually with interest equal to 10 percent of the beginning capital balance for the year.O’Donnell will also have added to his capital account 10 percent of partnership income each year (without regard for the preceding interest figure) or $6,000, whichever is larger. All remaining income is credited to Reese.Neither partner is allowed to withdraw funds from the partnership during 2019.…
Jesse and Tim form a partnership by combining the assets of their separate businesses. Jesse contributes accounts receivable with a face amount of $50,000 and equipment with a cost of $185,000 and accumulated depreciation of $101,000. The partners agree that the equipment is to be valued at $67,800, that $4,000 of the accounts receivable are completely worthless and are not to be accepted by the partnership, and that $1,800 is a reasonable allowance for the uncollectibility of the remaining accounts receivable. Tim contributes cash of $21,500 and merchandise inventory of $45,000. The partners agree that the merchandise inventory is to be valued at $48,500. Journalize the entries in the partnership accounts for (a) Jesse's investment and (b) Tim's investment. If an amount box does not require an entry, leave it blank. a. b.
Michael works as an accountant at a large accounting firm. Michael is also a partner in XYZ partnership. In 2020, Michael spends 240 hours working in XYZ. His business partner, Beth, only spends 210 hours working in the partnership. The partnership has no employees other than the two partners who contribute their time. Michael has materially participated in the partnership. Group of answer choices True False
The TimpRiders LP has operated a motorcycle dealership for a number of years. Amir is the limited partner, Francesca is the general partner, and they share capital and profits equally. Francesca works full time managing the partnership. Both the partnership and the partners report on a calendar-year basis. At the start of the current year, Amir and Francesca had bases of $11,900 and $4,100, respectively, and the partnership did not have any liabilities. During the current year, the partnership reported the following results from operations: Net sales Cost of goods sold Operating expenses Short-term capital loss Tax-exempt interest §1231 gain On the last day of the year, the partnership distributed $4,100 each to Amir and Francesca. $ 684,000 511,000 186,000 Comprehensive Problem 09-81 Part 1 (Algo) a. Year-end basis b. Loss limited by tax basis c. Loss limited by passive activity 2,800 3,100 7,100 Required: a. What outside basis do Amir and Francesca have in their partnership interests…
Emilio Alvarez and Graciela Zavala joined together to form a partnership. Is it posible for them to lose a greater amount than the amount of their investment in the partnership? Explian.
Phillips and Harris are partners in a used car business. Under their oral partnership, each has an equal voice in the conduct and management of the business. Because of their irregular business hours, the two further agreed that they could use any partnership vehicle as desired. This use includes transportation to and from work, even though the vehicles are for sale at all times. Harris conducted partnership business both at the used car lot and from his home. He was on call by Phillips or customers at his home, and he went back to the lot two or three times after going home. While driving a partnership vehicle home from the used car lot, Harris negligently hit a car driven by Cook, who brought this action against Harris and Phillips individually and as copartners for his injuries. Who is liable?