Kristie Is a 25% Member in the KLM LLC

question 223

Multiple Choice

Kristie is a 25% member in the KLM LLC. At the end of the year, KLM has accounts payable of $60,000 (recourse to the LLC but not guaranteed by the LLC members) , and a nonrecourse debt related to real estate of $300,000 (meets the at risk limitation requirements) . In addition, Kristie personally guaranteed a $50,000 liability for KLM's equipment purchases. Which one of the following shows the information that should be reported on Kristie's Schedule K-1 for the year?

• A) $15,000 recourse debt, $75,000 qualified nonrecourse debt.
• B) $90,000 nonrecourse debt.
• C) $90,000 nonrecourse debt, $12,500 recourse debt.
• D) $65,000 recourse debt, $75,000 qualified nonrecourse debt.
• E) $50,000 recourse debt, $15,000 nonrecourse debt, $75,000 qualified nonrecourse debt.

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Definitions:

Metacognition

An awareness and understanding of one’s own thought processes, often referred to as "thinking about thinking."

Problem Solving

The process of identifying solutions to difficult or complex issues through analytical thought, creativity, and logical reasoning.

Distributive Justice

The principle concerned with the fair allocation of resources among diverse members of a community.

Autonomous Morality

The stage where individuals recognize the flexibility of rules and laws, basing their judgments on the intentions behind actions rather than the actions themselves.