Question

Kim received a 1/3 profits and capital interest in Bright Line, LLC in exchange for legal services she provided. In addition to her share of partnership profits or losses, she receives a $26,000 guaranteed payment each year for ongoing services she provides to the LLC. For X4, Bright Line reported the following revenues and expenses: Sales - $146,000, Cost of Goods Sold - $86,000, Depreciation Expense - $43,000, Long-Term Capital Gains - $11,000, Qualified Dividends - $5,600, and Municipal Bond Interest - $3,600. How much ordinary business income (loss) will Bright Line allocate to Kim on her Schedule K-1 for X4?

A) ($9,000)

B) $7,800

C) $11,400

D) $17,000

E) None of the choices will be reported as ordinary business income (loss) on Schedule K-1

Answer 1

answered by: anonymous