John smith (223-55-7000), Elizabeth Hall (756-87-4138) and Marc Sorbello (241-67-8476) are equal partners in XYZ, a general partnership which provides public relations services to various small businesses. XYZ's federal I.D. Number is 11-2343111. The partnership uses the cash method of accounting and adopts the calendar year for reporting. It began business operations on Jan 15, 2012. Its current address is 722 cobble lane, boca ratón, Fl 33156. The following information was taken from the partnership's income statement for the current year (2017):
Fees collected 260,200
Taxable interest 900
Tax-exempt interest 600
Long term capital loss (3,000)
Short term capital gain 1,000
Contributions to Florida Atlantic university 4,900
Employee salaries 69,000
Equipment rental 9,000
Office rentals paid 34,000
Salaries, Ruth smith, managing partner 23,000
Entertainment and meals 4,000
Payroll taxes 14,500
Office expense 20,000
The partnership claimed 3,600 depreciation for both tac and financial accounting purposes. Assume the depreciation creates a tax preference of 1,200. Each other withdrew 20,000 cash from the partnership during the year.
The partnership's beginning and ending tax basis balance sheets for 2017 are as follows:
Cash 15,200 ?
Tax exempt securities 10,000 10,000
Marketable securities 26,000 25,000
Office furniture and equipment 65,000 65,000
Accumulated depreciation (16,840) ?
Total assets 99,360 ?
Mortgage payable on leasehold
improvements and equipment 42,000 39,000
Capital, Smith 19,120 ?
Capital, Hall 19,120 ?
Capital, Sorbello 19,120. ?
Total liabilities and capital 99,360 ?
The partners share equally in all partnership liabilities, since all initial contribution and all ingoing allocation and distributions are pro rata.
None of the partners sold any portion of their interests in the partnership during 2017. The partnerships operations are entirely restricted to the Boca Raton Florida metropolitan area. All partners are U.S citizens. The partnership had no foreign operations, no foreign bank accounts, and no interests in any foreign trusts or other partnerships. The partnership is not publicly traded and is not a statutory tax shelter. XYZ does not own an interest in any other partnerships.
The IRS's business code for the partnership is 8740. The partnership is not subject to the consolidated audit procedures and does not have a tax matters partner. The partnership files its tax return in Boca Raton, Fl. Partner Marc Sorbello lives at 216 creek road, boca ratón, Fl. 32678.
what is the federal income tax return for XYZ partnership for the 2017 year. ?
Question 2: Please demonstrate how it would look On the following tax forms:
- form 1065
- Form 1065's schedule B, schedule K, schedule L, schedule m-1,schedule m-2 and schedule k-1
Question 3: what would be the appropriate tax federal income tax form that I would mail to Marc Sorbello so that Marc can properly submit his individual income tax return ? How would the form look like filled?