Question

Jayanthi and Krish each own a 50 percent general partner interest in the JK Partnership. The following information is available regarding the partnership’s 2016 activities:

Sales revenue	$	500,000
Selling expenses		200,000
Depreciation expense		30,000
Long-term capital gain		9,000
Nondeductible expenses		2,000
Partnership debts, beginning of the year		100,000
Partnership debts, end of the year		120,000
Partnership distributions
Jayanthi		50,000
Krish		50,000

a. Complete Schedule K, Form 1065, for the partnership.

b. Complete Schedule K-1, Form 1065, for Jayanthi.

Answer 1

a: Schedule K , form 1065 for partnmership:-

(Relevant lines of form are filled)

1a Gross Receipts or sales: 500,000

1b Returns and allowances: Nil

1c Balance (Subtract line 1b frm 1 a= 500,000

2 Cost of Goods Sold 200,000

3. Gross Profit 300,000

8. Total Income 300,000.

10. Guaranteed payment to partners 100,000

.16 a Depreciation 30,000

21 Total deductions 130,000

22 Ordinary business income (Loss)

(Subtact line 21 from line 8) 170,000

Answer b.

Note: Ordinary bsiness income to Jatyanthi= (500,000-200,000-30,000)/2=135,000

Schedule K-1, Form 1065, for Jayanthi.

1. Ordinary business income = 135,000

9a Net long term Capital gain(Loss) = 4,500

10.Net Section 1231 gain(loss) = 139,500

11. Other income(loss)

Non deduct exp = 1000 (2000/2)

Debt increase $10,000 (120000-100000)/2