Click here to have a similar A+ quality paper

Order Now

Tax Return 9: Partnership Instructions: Please complete the required federal partnership income tax return forms for AAA Fast Plumbing for the 2012 tax year, unless instructed otherwise, based upon the facts presented below. Also, if required information is missing, use reasonable assumptions to fill in the gaps. XXXXX XXXXX and Devontae Johnson have been life-long friends. Both Michael and Devontae started to work for the same national plumbing repair company immediately after graduating from technical college. After nearly a decade of working for that same company, Michael and Devontae decided to venture out on their own and form their own plumbing company called AAA Fast Plumbing Repair (AAA). They formed their business entity as a limited liability company (LLC). Michael and Devontae each own 50% of the company. The company has been successful primarily based upon reputation and the fact that AAA is available 24 hours a day, seven days a week. Although AAA charges a premium for after normal business hour calls, most of its competitors will not perform the services past 9 p.m. and as a result, AAA finds itself often as one of the only available choices for middle of the night emergencies. AAA has several employees and, as a result of implementing technology solutions to aid in its call dispatch program, AAA has been able to better expand its service area to now include a three-county area instead of just one. Information relating to AAA and its owners is as follows: Name of Company: AAA Fast Plumbing Repair, LLC Address: 1456 East Buena Vista Blvd. Los Angeles, CA 90001 (has not changed since inception) Company formed and started: January 1, 2010 Accounting Method: Cash Tax-year end: December 31 Employer Identification Number: 34-1234567 Members’ Information: XXXXX XXXXX 1515 West Bloomington Street Los Angeles, CA 90001 SSN- XXX-XX-XXXX Profit/Loss/Capital Membership interest is 50%. Devontae Johnson 19 East Violet Circle Los Angeles, CA 90001 SSN-XXX-XX-XXXX Profit/Loss/Capital Membership interest is 50%. Other information: • AAA is a domestic limited liability company • Michael and Devontae are not related. • Michael and Devontae are both U.S. citizens. • Both Michael and Devontae are managing members. • AAA has not and did not file a Form 8893 or anything similar to it this year or in the past • AAA is not a publicly traded partnership • During the year no debt was cancelled or forgiven in relation to AAA. • AAA is not required to file a Form 8918 • AAA did not have or control a foreign bank account or have authority over any such financial account • AAA was not the grantor of or a transferor to a foreign trust • AAA has never made a Section 754 election • AAA has never entered into a like-kind exchange or distributed a tenancy-in-common or other undivided interest in partnership property • AAA has never been required to file Form 8858 • Michael and Devontae are both U.S. citizens • AAA was required to file Form(s) 1099 related to certain payments it made during the year and those forms were filed on a timely basis • AAA was not required to file any Form(s) 5471 during the year • Michael is the agreed upon Tax Matters Partner (TMP) • Both Michael and Devontae are active in the business and work full-time for AAA • The debt owed to First National Bank is a non-recourse obligation and neither Michael nor Devontae have guaranteed its repayment (see balance sheet below). • During the year, Michael and Devontae each contributed $20,000 to the capital of AAA • AAA does not maintain any inventory. AAA purchases supplies and has a policy of expensing such purchases as paid for tax and book purposes • During the year, Michael and Devontae each received a $75,000 distribution from each of their respective capital accounts ? Financial Statements: Balance Sheet Assets: 1/01/CY 12/31/CY Cash $ 30,000 $ 45,000 Tax-exempt Securities 100,000 100,000 Building 4,000,000 4,000,000 Less: Acc. Depreciation (550,000) (650,000) Equipment 2,500,000 3,250,000 Less: Acc. Depreciation (1,250,000) (1,435,000) Land 1,000,000 1,000,000 Total Assets: $5,830,000 $6,310,000 Liabilities and Capital: Note Payable-First National Bank $4,500,000 $4,879,360 Note Payable-XXXXX XXXXX 300,000 300,000 Note Payable-Devontae Johnson 200,000 200,000 Capital Account-MR 415,000 465,320 Capital Account-DJ 415,000 465,320 Total Liabilities and Capital: $5,830,000 $6,310,000 ? Income Statement for the year ending December 31, 20CY Item Amount Income: Service Revenue-Cash $ 243,565 Service Revenue-Credit Cards $1,422,710 Consulting Revenue-Cash $ 50,950 Consulting Revenue-Credit Cards $ 155,005 Interest Income-First National Bank $ 1,540 Municipal Bond Interest Income $ 2,500 Total Income

Tax Return 9: Partnership

Instructions:

Please complete the required federal partnership income tax return forms for AAA Fast Plumbing for the 2012 tax year, unless instructed otherwise, based upon the facts presented below. Also, if required information is missing, use reasonable assumptions to fill in the gaps.

XXXXX XXXXX and Devontae Johnson have been life-long friends. Both Michael and Devontae started to work for the same national plumbing repair company immediately after graduating from technical college. After nearly a decade of working for that same company, Michael and Devontae decided to venture out on their own and form their own plumbing company called AAA Fast Plumbing Repair (AAA). They formed their business entity as a limited liability company (LLC). Michael and Devontae each own 50% of the company. The company has been successful primarily based upon reputation and the fact that AAA is available 24 hours a day, seven days a week. Although AAA charges a premium for after normal business hour calls, most of its competitors will not perform the services past 9 p.m. and as a result, AAA finds itself often as one of the only available choices for middle of the night emergencies.

AAA has several employees and, as a result of implementing technology solutions to aid in its call dispatch program, AAA has been able to better expand its service area to now include a three-county area instead of just one.

Information relating to AAA and its owners is as follows:

Name of Company: AAA Fast Plumbing Repair, LLC
Address: 1456 East Buena Vista Blvd.
Los Angeles, CA 90001 (has not changed since inception)
Company formed and started: January 1, 2010
Accounting Method: Cash
Tax-year end: December 31
Employer Identification Number: 34-1234567

Members’ Information:

XXXXX XXXXX
1515 West Bloomington Street
Los Angeles, CA 90001
SSN- XXX-XX-XXXX

Profit/Loss/Capital Membership interest is 50%.

Devontae Johnson
19 East Violet Circle
Los Angeles, CA 90001
SSN-XXX-XX-XXXX

Profit/Loss/Capital Membership interest is 50%.

Other information:

• AAA is a domestic limited liability company
• Michael and Devontae are not related.
• Michael and Devontae are both U.S. citizens.
• Both Michael and Devontae are managing members.
• AAA has not and did not file a Form 8893 or anything similar to it this year or in the past
• AAA is not a publicly traded partnership
• During the year no debt was cancelled or forgiven in relation to AAA.
• AAA is not required to file a Form 8918
• AAA did not have or control a foreign bank account or have authority over any such financial account
• AAA was not the grantor of or a transferor to a foreign trust
• AAA has never made a Section 754 election
• AAA has never entered into a like-kind exchange or distributed a tenancy-in-common or other undivided interest in partnership property
• AAA has never been required to file Form 8858
• Michael and Devontae are both U.S. citizens
• AAA was required to file Form(s) 1099 related to certain payments it made during the year and those forms were filed on a timely basis
• AAA was not required to file any Form(s) 5471 during the year
• Michael is the agreed upon Tax Matters Partner (TMP)
• Both Michael and Devontae are active in the business and work full-time for AAA
• The debt owed to First National Bank is a non-recourse obligation and neither Michael nor Devontae have guaranteed its repayment (see balance sheet below).
• During the year, Michael and Devontae each contributed $20,000 to the capital of AAA
• AAA does not maintain any inventory. AAA purchases supplies and has a policy of expensing such purchases as paid for tax and book purposes
• During the year, Michael and Devontae each received a $75,000 distribution from each of their respective capital accounts

?
Financial Statements:

Balance Sheet

Assets: 1/01/CY 12/31/CY

Cash $ 30,000 $ 45,000
Tax-exempt Securities 100,000 100,000
Building 4,000,000 4,000,000
Less: Acc. Depreciation (550,000) (650,000)
Equipment 2,500,000 3,250,000
Less: Acc. Depreciation (1,250,000) (1,435,000)
Land 1,000,000 1,000,000

Total Assets: $5,830,000 $6,310,000

Liabilities and Capital:

Note Payable-First National Bank $4,500,000 $4,879,360
Note Payable-XXXXX XXXXX 300,000 300,000
Note Payable-Devontae Johnson 200,000 200,000

Capital Account-MR 415,000 465,320
Capital Account-DJ 415,000 465,320

Total Liabilities and Capital: $5,830,000 $6,310,000

?
Income Statement for the year ending December 31, 20CY

Item Amount

Income:

Service Revenue-Cash $ 243,565
Service Revenue-Credit Cards $1,422,710
Consulting Revenue-Cash $ 50,950
Consulting Revenue-Credit Cards $ 155,005

Interest Income-First National Bank $ 1,540
Municipal Bond Interest Income $ 2,500

Total Income

Click here to have a similar A+ quality paper

Order Now