70.2K

Verified Solution

Link Copied!

Required information (The following information applies to the questions displayed below.) Aaron, Deanne, and Keon formed the Blue Bell General Partnership at the beginning of the current year. Aaron and Deanne each contributed $124,000 and Keon transferred an acre of undeveloped land to the partnership. The land had a tax basis of $56,000 and was appraised at $180,000. The land was also encumbered with a $56,000 nonrecourse mortgage for which no one was personally liable. All three partners agreed to split profits and losses equally. At the end of the first year, Blue Bell made a $7,200 principal payment on the mortgage. For the first year of operations, the partnership records disclosed the following information: Sales revenue Cost of goods sold Operating expenses Long-term capital gains $1231 gains Charitable contributions Municipal bond interest Salary paid as a guaranteed payment to Deanne (not included in expenses) $ 480,000 470,000 70,000 1,500 600 300 300 3,000 c. Using the information generated in answering parts (a) and (b), prepare Blue Bell's page 1 and Schedule K to be included with its Form 1065 for its first year of operations, along with Schedule K-1 for Deanne. (Use 2021 tax rules regardless of year on tax form. Percentages should be rounded to two decimal places. Losses should be entered as negative numbers and input all other values as positive numbers.)

Answer & Explanation Solved by verified expert

See Answer