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:

Age-Related Differences

Variations in abilities, behaviors, and characteristics that are typically observed between different age groups.

Video Games

Electronic games played through a computer, gaming console, or mobile device, often involving interactive and immersive experiences.

Light Sensitive

The quality of being responsive or reactive to the presence or intensity of light.

Retina

The light-sensitive layer of tissue at the back of the inner eye, which is vital for vision.