Federal Tax Accounting
Please use the information below to complete the Form 1065 and the Schedule K-1 for Malcolm Fox only. Blank forms can be found on the IRS site or Doc Sharing. If you have a tax-software package please feel free to use the package but be aware that I will not be able to answer specific questions about the software package.
GENERAL COMPANY INFORMATION
Malcolm Fox and Rhonda Ford are equal partners in MFRF, LLP, a small business consulting firm. The partners are not related and are all US citizens. Malcolm Fox lives at 415 Knight Court in Freeport, ME 04469 with a social security number of 123-45-6789.
The limited liability partnership uses the cash basis and the calendar year and began operation on January 1, 2009. The Federal ID is 11-1111111 and the current address is 2835 Harbor View Drive, Freeport, ME 04469 for MFRF, LLP.
The partnership placed its 65,000 of furniture and fixtures in service on January 1, 2009. This year, it claimed $8,119 of depreciation expense on for tax (line 16a and 16c) and financial purposes. The depreciation creates and adjustment of $156 for alternative minimum tax purposes. No assets were placed in service in the current year.
On Oct. 15, the partnership sold securities for $40,000; it had purchased the securities for $44,000 on February 1, 2009, the firm’s activities do not constitute “qualified production activities” for purposes of Section 199 deductions.
Net income per books is $200,900. On January 1, 2010, the partners’ capital accounts equal 120,000 each. No additional capital contributions were made in 2010 and each partner made withdrawals of 120,000 during the year.
MFRF, LLP Income Statement
Revenues:
Fees Collected 800,000
Dividend Income (all qualified) 3,600
Taxable business interest 1,400
Tax-exempt interest 2,600
Long-term capital loss (4,000)
Total Revenues 803,600
Expenses:
Accounting Fees 12,000
Advertising 5,000
Contribution to United Way 2,000
Depreciation Expense 8,119
Employee Salaries 340,000
Guaranteed payments-M.Fox 140,000
Entertainment-50% disallowed 2,600
Travel 12,000
Equipment Rental 6,000
Office rentals paid 7,000
Interest Expense 4,000
Insurance Premiums 2,200
Office Expense 20,481
Payroll Taxes 25,600
Utilities 15,700
Total Expenses 602,700
MFRF, LLP Balance Sheet Assets January 1, 2013 December 31, 2013 Cash $86,576 $84,595 Tax-exempt securities 52,000 52,000 Marketable securities 120,000 76,000 Furniture and equipment 65,000 65,000 Accumulated depreciation (36,576) (44,695) Total Assets $287,000 $232,900 ====== ======
Liabilities and Equity January 1, 2013 December 31, 2013 Nonrecourse debt on Equipment $47,000 $32,000 Capital, Fox 120,000 100,450 Capital, Ford 120,000 100,450 Total Liabilities and Equity $287,000 $232,900 ====== =======