(Tax ex) The Bolos, LLC limited partnership was formed on Sep 30, 2008, by Zed, its general partner, and a limited partner, Amy. Each contributed an equal amount of cash to start the new enterprise. In addition, Amy loaned the LLC $100,000. She has not been paid back yet. The partnership has an increase in recourse debt of $20,000.

Also, Bolos, LLC is a holiday equipment retailer. Their specialties are grave markers, potted flowers, toys, and tequila. Zed has 40% profits and capital interest and the limited partner holds the remaining 60% of the profits and capital interest. Zed is actively involved in managing the business and the limited partner is simply an investor. Zed's basis at the beginning of 2020 was $255,000, while Amy’s was $100,000. Bolos, LLC uses the accrual method of accounting and has a calendar year-end.

a. Calculate the partners' ending bases in their partnership interests.

b. Complete Zed's Schedule K-1 and Amy's Schedule K-1.

Answer rating: 100% (QA)

Ans a Opening capitalBasis at the beginning Increase in recourse debt 20000 psr Amys Loan only alloc... View the full answer