Note: This problem is for the 2021 tax year. Ryan Ross (111-11-1112), Oscar Omega (222-22-2223), Clark Carey (333-33-3334), and Kim Kardigan (444-44-4445) are equal active members in ROCK the Ages LLC. ROCK serves as agent and manager for prominent musicians in the Los Angeles area. The LLC's Federal ID number is 55-5555556. It uses the cash basis and the calendar year and began operations on January 1,2009 . Its current address is 6102 Wilshire Boulevard, Suite 2100, Los Angeles, CA 90036. ROCK was the force behind such music icons as Adrianna Venti, Drake Malone, Elena Gomez, Tyler Quick, Queen Bey, and Bruno Mercury and has had a very profitable year. The following information was taken from the LLC's income statement for the current year. Recently, ROCK has taken advantage of bonus depreciation and 179 deductions and fully remodeled the premises and upgraded its leasehold improvements. This year, ROCK wrapped up its remodel with the purchase of $20,000 of office furniture for which it will claim a 179 deduction. (For simplicity, assume that ROCK uses the same cost recovery methods for both tax and financial purposes.) There is no depreciation adjustment for alternative minimum tax purposes. ROCK invests much of its excess cash in non-dividend-paying growth stocks and tax-exempt securities. During the year, the LLC sold two securities. On June 15, 2021, ROCK purchased 1,000 shares of Tech, Inc., stock for $100,000; it sold those shares on December 15 , 2021, for $80,000. On March 15, 2020, ROCK purchased 2,000 shares of BioLabs, Inc., stock for $136,000; it sold those shares for $160,000 on December 15,2021 . These transactions were reported to the IRS on Forms 1099-B; ROCK's basis in these shares was reported. Net income per books is $840,000. On January 1,2021 , the members' tax basis capital accounts equaled $200,000 each. No additional capital contributions were made in 2021. In addition to their guaranteed payments, each member withdrew $250,000 cash during the year. All contributions and distributions have been in cash, so the LLC has no net unrecognized 5704(C) gain or loss. The LLC's balance sheet as of December 31,2021 , is as follows. The firm's activities do not constitute "qualified production activities" for purposes of the 199 deduction. (Note that the 179 deduction is a business-related expense.) The LLC's UBIA (unadjusted basis immediately after acquisition) equals the total original cost of all leasehold improvements, or $980,000. All debt is shared equally by the members. Each member has personally guaranteed the debt of the LLC. All members are active in LLC operations. The business code for the entity is 711410. Complete the 2021 form 1065 for ROCK the Ages LLC with appropriate forms and schedules. Prepare Schedule K-1 for Ryan Ross. - If an amount box does not require an entry or the answer is zero, enter " 0 ". - Enter all amounts as positive numbers, unless otherwise instructed. - If required, round amounts to the nearest dollar. - Make realistic assumptions about any missing data. Prepare Schedule K1 for Ryan Ross, 15520 W. Earlson Street, Pacific Palisades, CA 90272 . If required, use the minus sign to indicate a loss. Schedule K-1 I2 If this partner is a retirement plan (IRA/SEP/Keogh/etc.), check Check My Work Schedule K-1 Check My Work BAA For Paperwork Reduction Act Notice, see instructions ror rorn Rock the Ages LLC 55-5555556 Schedule K-1 Schedule K-1 Rock the Ages LLC 55-5555556 Schedule K-1 (Form 1065) 2021 Item L Partner's Capital Account Analysis Supplemental Information Other Increase (Decrease) Other Increase Tax-Exempt Interest and/or Tax-Exempt Other Income Other Decrease Guaranteed Payments (other than health insurance). Non-Deductible Expenses Check My Work Box 20, Code N Business Interest Expense Included as a Deduction on the Following tine(s) Below is deductible business interest expense for inclusion in the separate loss class for computing any basis limitation (defined in section 704(d), Regulation section 1.163(j)-6(h)). Note: This problem is for the 2021 tax year. Ryan Ross (111-11-1112), Oscar Omega (222-22-2223), Clark Carey (333-33-3334), and Kim Kardigan (444-44-4445) are equal active members in ROCK the Ages LLC. ROCK serves as agent and manager for prominent musicians in the Los Angeles area. The LLC's Federal ID number is 55-5555556. It uses the cash basis and the calendar year and began operations on January 1,2009 . Its current address is 6102 Wilshire Boulevard, Suite 2100, Los Angeles, CA 90036. ROCK was the force behind such music icons as Adrianna Venti, Drake Malone, Elena Gomez, Tyler Quick, Queen Bey, and Bruno Mercury and has had a very profitable year. The following information was taken from the LLC's income statement for the current year. Recently, ROCK has taken advantage of bonus depreciation and 179 deductions and fully remodeled the premises and upgraded its leasehold improvements. This year, ROCK wrapped up its remodel with the purchase of $20,000 of office furniture for which it will claim a 179 deduction. (For simplicity, assume that ROCK uses the same cost recovery methods for both tax and financial purposes.) There is no depreciation adjustment for alternative minimum tax purposes. ROCK invests much of its excess cash in non-dividend-paying growth stocks and tax-exempt securities. During the year, the LLC sold two securities. On June 15, 2021, ROCK purchased 1,000 shares of Tech, Inc., stock for $100,000; it sold those shares on December 15 , 2021, for $80,000. On March 15, 2020, ROCK purchased 2,000 shares of BioLabs, Inc., stock for $136,000; it sold those shares for $160,000 on December 15,2021 . These transactions were reported to the IRS on Forms 1099-B; ROCK's basis in these shares was reported. Net income per books is $840,000. On January 1,2021 , the members' tax basis capital accounts equaled $200,000 each. No additional capital contributions were made in 2021. In addition to their guaranteed payments, each member withdrew $250,000 cash during the year. All contributions and distributions have been in cash, so the LLC has no net unrecognized 5704(C) gain or loss. The LLC's balance sheet as of December 31,2021 , is as follows. The firm's activities do not constitute "qualified production activities" for purposes of the 199 deduction. (Note that the 179 deduction is a business-related expense.) The LLC's UBIA (unadjusted basis immediately after acquisition) equals the total original cost of all leasehold improvements, or $980,000. All debt is shared equally by the members. Each member has personally guaranteed the debt of the LLC. All members are active in LLC operations. The business code for the entity is 711410. Complete the 2021 form 1065 for ROCK the Ages LLC with appropriate forms and schedules. Prepare Schedule K-1 for Ryan Ross. - If an amount box does not require an entry or the answer is zero, enter " 0 ". - Enter all amounts as positive numbers, unless otherwise instructed. - If required, round amounts to the nearest dollar. - Make realistic assumptions about any missing data. Prepare Schedule K1 for Ryan Ross, 15520 W. Earlson Street, Pacific Palisades, CA 90272 . If required, use the minus sign to indicate a loss. Schedule K-1 I2 If this partner is a retirement plan (IRA/SEP/Keogh/etc.), check Check My Work Schedule K-1 Check My Work BAA For Paperwork Reduction Act Notice, see instructions ror rorn Rock the Ages LLC 55-5555556 Schedule K-1 Schedule K-1 Rock the Ages LLC 55-5555556 Schedule K-1 (Form 1065) 2021 Item L Partner's Capital Account Analysis Supplemental Information Other Increase (Decrease) Other Increase Tax-Exempt Interest and/or Tax-Exempt Other Income Other Decrease Guaranteed Payments (other than health insurance). Non-Deductible Expenses Check My Work Box 20, Code N Business Interest Expense Included as a Deduction on the Following tine(s) Below is deductible business interest expense for inclusion in the separate loss class for computing any basis limitation (defined in section 704(d), Regulation section 1.163(j)-6(h))