Question
In: Accounting
Ray and Chuck own 50 percent capital and profits interests in Alpine Properties LLC. Alpine builds...
Ray and Chuck own 50 percent capital and profits interests in Alpine Properties LLC. Alpine builds and manages rental real estate, and Ray and Chuck each work full time (over 1,000 hours per year) managing Alpine. Alpine’s debt (both at the beginning and end of the year) consists of $1,570,000 in nonrecourse mortgages obtained from an unrelated bank and secured by various rental properties. At the beginning of the current year, Ray and Chuck each had a tax basis of $250,000 in their respective LLC interest, including their share of the nonrecourse mortgage debt. Alpine’s ordinary business losses for the current year totaled $532,000, and neither member is involved in other activities that generate passive income. (Leave no answer blank. Enter zero if applicable.)
d. If both Ray and Chuck are single and Ray has a current-year loss of $16,000 from a sole proprietorship, how much trade or business loss can each deduct on their tax returns?\
| Ray | Chuck |
| Loss deductible |
Solutions
ekkarill92 answered 2 years agoRelated Solutions
Suki and Steve own 50 percent capital and profits interests in Lorinda LLC. Lorinda operates the...
Suki and Steve own 50 percent capital and profits interests in
Lorinda LLC. Lorinda operates the local minor league baseball team
and owns the stadium where the team plays. Although the debt
incurred to build the stadium was paid off several years ago,
Lorinda owes its general creditors $300,000 (at the beginning of
the year) that is not secured by firm property or guaranteed by any
of the members. At the beginning of the current year, Suki and
Steve had...
Dave LaCroix recently received a 10 percent capital and profits interest in Cirque Capital LLC in...
Dave LaCroix recently received a 10 percent capital and profits
interest in Cirque Capital LLC in exchange for consulting services
he provided. If Cirque Capital had paid an outsider to provide the
advice, it would have deducted the payment as compensation expense.
Cirque Capital’s balance sheet on the day Dave received his capital
interest appears below:
Basis
Fair Market
Value
Assets:
Cash
$
300,000
$
300,000
Investments
280,000
304,000
Land
130,000
290,000
Totals
$
710,000
$
894,000
Liabilities and capital:...
Ashlee, Hiroki, Kate, and Albee LLC each own a 25 percent interest in Tally Industries LLC,...
Ashlee, Hiroki, Kate, and Albee LLC each own a 25 percent
interest in Tally Industries LLC, which generates annual gross
receipts of over $10 million. Ashlee, Hiroki, and Kate manage the
business, but Albee LLC is a nonmanaging member. Although Tally
Industries has historically been profitable, for the last three
years losses have been allocated to the members. Given these facts,
the members want to know whether Tally Industries can use the cash
method of accounting. Why or why not?
Sarah (single) is a 50 percent owner in Beehive LLC (taxed as a partnership). Sarah does...
Sarah (single) is a 50 percent owner in Beehive LLC (taxed as a
partnership). Sarah does not do any work for Beehive. Beehive LLC.
reported $600,000 of taxable business income for the year (2020).
Before considering her 50 percent business income allocation from
Beehive and the self-employment tax deduction (if any), Sarah’s
adjusted gross income is $150,000 (all employee salary). Answer the
following questions for Sarah.
What is Sarah’s net investment income tax liability (assume no
investment expenses)?
Sarah (single) is a 50 percent owner in Beehive LLC (taxed as a partnership). Sarah does...
Sarah (single) is a 50 percent owner in Beehive LLC (taxed as a
partnership). Sarah does not do any work for Beehive. Beehive LLC.
reported $600,000 of taxable business income for the year (2020).
Before considering her 50 percent business income allocation from
Beehive and the self-employment tax deduction (if any), Sarah’s
adjusted gross income is $150,000 (all employee salary). Answer the
following questions for Sarah.
c. What is Sarah’s self-employment tax
liability?
d. What is Sarah’s additional Medicare tax...
Sarah (single) is a 50 percent owner in Beehive LLC (taxed as a partnership). Sarah does...
Sarah (single) is a 50 percent owner in Beehive LLC (taxed as a
partnership). Sarah does not do any work for Beehive. Beehive LLC.
reported $600,000 of taxable business income for the year (2020).
Before considering her 50 percent business income allocation from
Beehive and the self-employment tax deduction (if any), Sarah’s
adjusted gross income is $150,000 (all employee salary). Show all
work.
c. What is Sarah’s self-employment tax liability?
d. What is Sarah’s additional Medicare tax liability?
Tall Tree LLC was recently formed with the following members: Name Tax Year End Capital/Profits %...
Tall Tree LLC was recently formed with the following
members:
Name
Tax Year End
Capital/Profits %
Eddie Robinson
December 31
35%
Pitcher Lenders LLC
June 30
40%
Perry Homes Inc.
October 31
25%
What is the least aggregate deferral if the required taxable
year-end for Tall Tree LLC is October 31st? (Carry your answer to
one decimal e.g., 5.2)
Pam and Joe each own 50% of Tucson LLC a limited liability company located in Tucson,...
Pam and Joe each own 50% of Tucson LLC a limited liability
company located in Tucson, AZ which was created in April of 2019.
Tucson LLC provides veterinary services and uses the cash method of
accounting. Pam and Joe have come to you on December 30, 2019 to
ask your advice on some transactions they are considering.
Tucson's financial information is provided below:
Profit and Loss Statement January 1, 2019-December 30,
2019:
Gross Receipts:
Veterinary Services
$675,000
Expenses:
Salaries
$400,000...
Pam and Joe each own 50% of Tucson LLC a limited liability company located in Tucson,...
Pam and Joe each own 50% of Tucson LLC a limited liability
company located in Tucson, AZ which was created in April of 2019.
Tucson LLC provides veterinary services and uses the cash method of
accounting. Pam and Joe have come to you on December 30, 2019 to
ask your advice on some transactions they are considering.
Tucson's financial information is provided below:
Profit and Loss Statement January 1, 2019-December 30,
2019:
Gross Receipts:
Veterinary Services
$675,000
Expenses:
Salaries
$400,000...
Pam and Joe each own 50% of Tucson LLC a limited liability company located in Tucson,...
Pam and Joe each own 50% of Tucson LLC a limited liability
company located in Tucson, AZ which was created in April of 2019.
Tucson LLC provides veterinary services and uses the cash method of
accounting. Pam and Joe have come to you on December 30, 2019 to
ask your advice on some transactions they are considering.
Tucson's financial information is provided below:
Profit and Loss Statement January 1, 2019-December 30,
2019:
Gross Receipts:
Veterinary Services
$675,000
Expenses:
Salaries
$400,000...
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