Emily Jackson (Social Security number 765-12-4326) and James Stewart (Social Security number 466-74-9932) are partners in...

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Emily Jackson (Social Security number 765-12-4326) and James Stewart (Social Security number 466-74-9932) are partners in a partnership that owns and operates a barber shop. The partnership's first year of operation is 2022. Emily and James divide income and expenses equally. The partnership name is J&S Barbers, it is located at 1023 Lexington Avenue, New York, NY 10128, and its Federal ID number is 95-6767676. The 2022 financial statements for the partnership are presented below. J&S Barbers Income Statement for the Year Ending December 31, 2022 Gross income from operations $349,000 Interest income 1,000 Deductions: Salaries to employees (includes guaranteed payments of $10,000 to Emily) 100,000 Payroll taxes 11,000 Supplies 7,900 Rent 90,000 Depreciation 32,100 Short-term capital loss Non-deductible entertainment Charitable contributions 2,000 3,000 1,000 Net income $103,000 Partners' withdrawals (each partner) $50,000 J&S Barbers Balance Sheet as of December 31, 2022 Assets: Cash $92,000 Leasehold improvements $3,100 Equipment 32,000 Accumulated depreciation (32,100) 3,000 $95,000 Liabilities and Capital: Recourse long-term debt $52,000 Partners' capital ($20,000 contributed by each partner) 43,000 $95,000 Emily lives at 456 E. 70th Street, New York, NY 10006, and James lives at 436 E. 63rd Street, New York, NY 10012. Required: Complete Form 1065 and the accompanying K-1 forms. Do not complete Schedule D for the capital loss, Form 4562 for depreciation, or Schedule B- 1 related to ownership of the partnership. Complete J&S Barbers' Schedule K-1 for Emily. Note: Z* is for qualified business income, Z** is for allocated W-2 wages, and Z*** is the allocated amount of the unadjusted basis of qualified property. 651121 Final K-1 Amended K-1 OMB No. 1545-0123 Schedule K-1 Part III Partner's Share of Current Year Income, 2022 (Form 1065) Deductions, Credits, and Other Items Department of the Treasury 1 For calendar year 2022, or tax year Internal Revenue Service Ordinary business income (loss) 14 Self-employment earnings (loss) x A beginning / 2022 ending 2 Net rental real estate income (loss) Partner's Share of Income, Deductions, Credits, etc. See back of form and separate instructions. Part I Information About the Partnership 3 Other net rental income 15 Credits (loss) A Partnership's employer identification number B 95-6767676 Partnership's name, address, city, state, and ZIP code J&S Barbers 1023 Lexington Ave. New York, NY 10128 4a Guaranteed payments for services 10,000 4b Guaranteed payments for capital 16 Schedule K-3 is attached if checked.... C IRS center where partnership filed return Kansas City, MO D Check if this is a publicly traded partnership (PTP) Part II Information About the Partner E Partner's identifying number (Do not use TIN of a disregarded entity. See instructions.) 765-12-4326 F Partner's name, address, city, state, and ZIP code Emily Jackson 456 E. 70th Street 4c Total guaranteed payments 10,000 5 Interest income 6a Ordinary dividends 17 Alternative minimum tax (AMT) items 6b Qualified dividends 18 Tax-exempt income and nondeductible expenses New York, NY 10006 C G > General partner or LLC member- Limited partner or other LLC manager 6c Dividend equivalents member 7 Royalties Foreign partner H1 Domestic partner H2 If the partner is a disregarded entity (DE), enter the partner's: TIN Name 8 Net short-term capital gain (loss) 11 What type of entity is this partner? Individual 12 If this partner is a retirement plan (IRA/SEP/Keogh/etc.), check here J Beginning Partner's share of profit, loss, and capital (see instructions): Ending -1,000 9a Net long-term capital gain (loss) 19 Distributions A 9b Collectibles (28%) gain (loss) Beginning Ending Profit 0 % 50 % Loss 0 % 50 % Capital 0 % 50 % Check if decrease is due to sale or exchange of partnership interest K Partner's share of liabilities: Nonrecourse. Qualified nonrecourse financing.... Recourse. (loss) 9c Unrecaptured section 1250 20 Other information gain 240 10 Net section 1231 gain (loss) 11 Other income (loss) Z* Z** Beginning Ending Z*** $ 12 Section 179 deduction 21 Foreign taxes paid or accrued $ $ Check this box if Item K includes liability amounts from lower tier partnerships 13 Other deductions A 22 More than one activity for at-risk purposes* N Partner's capital account analysis Beginning capital account . . Capital contributed during the year.... Current year net income (loss) ... Other increase (decrease) (attach explanation)..... Withdrawals and distributions. Ending capital account.. 22 More than one activity for at-risk purposes* 23 More than one activity for passive activity purposes* 0 *See attached statement for additional information. 20,000 M Did the partner contribute property with a built-in gain (loss)? Yes No If "Yes," attach statement. See instructions. Partner's Share of Net Unrecognized Section 704(c) Gain or (Loss) Beginning . . . For IRS Use Only Emily Jackson (Social Security number 765-12-4326) and James Stewart (Social Security number 466-74-9932) are partners in a partnership that owns and operates a barber shop. The partnership's first year of operation is 2022. Emily and James divide income and expenses equally. The partnership name is J&S Barbers, it is located at 1023 Lexington Avenue, New York, NY 10128, and its Federal ID number is 95-6767676. The 2022 financial statements for the partnership are presented below. J&S Barbers Income Statement for the Year Ending December 31, 2022 Gross income from operations $349,000 Interest income 1,000 Deductions: Salaries to employees (includes guaranteed payments of $10,000 to Emily) 100,000 Payroll taxes 11,000 Supplies 7,900 Rent 90,000 Depreciation 32,100 Short-term capital loss Non-deductible entertainment Charitable contributions 2,000 3,000 1,000 Net income $103,000 Partners' withdrawals (each partner) $50,000 J&S Barbers Balance Sheet as of December 31, 2022 Assets: Cash $92,000 Leasehold improvements $3,100 Equipment 32,000 Accumulated depreciation (32,100) 3,000 $95,000 Liabilities and Capital: Recourse long-term debt $52,000 Partners' capital ($20,000 contributed by each partner) 43,000 $95,000 Emily lives at 456 E. 70th Street, New York, NY 10006, and James lives at 436 E. 63rd Street, New York, NY 10012. Required: Complete Form 1065 and the accompanying K-1 forms. Do not complete Schedule D for the capital loss, Form 4562 for depreciation, or Schedule B- 1 related to ownership of the partnership. Complete J&S Barbers' Schedule K-1 for Emily. Note: Z* is for qualified business income, Z** is for allocated W-2 wages, and Z*** is the allocated amount of the unadjusted basis of qualified property. 651121 Final K-1 Amended K-1 OMB No. 1545-0123 Schedule K-1 Part III Partner's Share of Current Year Income, 2022 (Form 1065) Deductions, Credits, and Other Items Department of the Treasury 1 For calendar year 2022, or tax year Internal Revenue Service Ordinary business income (loss) 14 Self-employment earnings (loss) x A beginning / 2022 ending 2 Net rental real estate income (loss) Partner's Share of Income, Deductions, Credits, etc. See back of form and separate instructions. Part I Information About the Partnership 3 Other net rental income 15 Credits (loss) A Partnership's employer identification number B 95-6767676 Partnership's name, address, city, state, and ZIP code J&S Barbers 1023 Lexington Ave. New York, NY 10128 4a Guaranteed payments for services 10,000 4b Guaranteed payments for capital 16 Schedule K-3 is attached if checked.... C IRS center where partnership filed return Kansas City, MO D Check if this is a publicly traded partnership (PTP) Part II Information About the Partner E Partner's identifying number (Do not use TIN of a disregarded entity. See instructions.) 765-12-4326 F Partner's name, address, city, state, and ZIP code Emily Jackson 456 E. 70th Street 4c Total guaranteed payments 10,000 5 Interest income 6a Ordinary dividends 17 Alternative minimum tax (AMT) items 6b Qualified dividends 18 Tax-exempt income and nondeductible expenses New York, NY 10006 C G > General partner or LLC member- Limited partner or other LLC manager 6c Dividend equivalents member 7 Royalties Foreign partner H1 Domestic partner H2 If the partner is a disregarded entity (DE), enter the partner's: TIN Name 8 Net short-term capital gain (loss) 11 What type of entity is this partner? Individual 12 If this partner is a retirement plan (IRA/SEP/Keogh/etc.), check here J Beginning Partner's share of profit, loss, and capital (see instructions): Ending -1,000 9a Net long-term capital gain (loss) 19 Distributions A 9b Collectibles (28%) gain (loss) Beginning Ending Profit 0 % 50 % Loss 0 % 50 % Capital 0 % 50 % Check if decrease is due to sale or exchange of partnership interest K Partner's share of liabilities: Nonrecourse. Qualified nonrecourse financing.... Recourse. (loss) 9c Unrecaptured section 1250 20 Other information gain 240 10 Net section 1231 gain (loss) 11 Other income (loss) Z* Z** Beginning Ending Z*** $ 12 Section 179 deduction 21 Foreign taxes paid or accrued $ $ Check this box if Item K includes liability amounts from lower tier partnerships 13 Other deductions A 22 More than one activity for at-risk purposes* N Partner's capital account analysis Beginning capital account . . Capital contributed during the year.... Current year net income (loss) ... Other increase (decrease) (attach explanation)..... Withdrawals and distributions. Ending capital account.. 22 More than one activity for at-risk purposes* 23 More than one activity for passive activity purposes* 0 *See attached statement for additional information. 20,000 M Did the partner contribute property with a built-in gain (loss)? Yes No If "Yes," attach statement. See instructions. Partner's Share of Net Unrecognized Section 704(c) Gain or (Loss) Beginning . . . For IRS Use Only

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