Kim Received a One-Third Profits and Capital Interest in Bright

question 125

Multiple Choice

Kim received a one-third 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 $30,000 guaranteed payment each year for ongoing services she provides to the LLC. For X4, Bright Line reported the following revenues and expenses: sales-$150,000, cost of goods sold-$90,000, depreciation expense-$45,000, long-term capital gains-$15,000, qualified dividends-$6,000, and municipal bond interest-$3,000. How much ordinary business income (loss) will Bright Line allocate to Kim on her Schedule K-1 for X4?

• A)($15,000)
• B)$6,000
• C)$9,000
• D)$15,000
• E)None of the choices will be reported as ordinary business income (loss)on Schedule K-1.

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Definitions:

Specific Goals

Objectives that are clearly defined, measurable, and time-bound, making them easier to achieve and evaluate.

Boiled Frog Syndrome

Boiled Frog Syndrome is a metaphor describing situations where people or organizations fail to recognize gradual but harmful changes over time, leading to severe consequences.

Full Time Job

Employment position that requires the employee to work a standard number of hours defined by the employer, usually around 40 hours per week.

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Feeling very anxious, tired, or unable to relax due to an excessive amount of pressure or demands.