Feeny University LLC serves as tutors and instructors for college students in the Philadelphia area. Relevant information is as follows:
The following information was taken from the LLCs income statement for 2016:
Fees and Commissions
Taxable interest income from bank deposits
Advertising and public relations
Section 179 expense
Employee salaries and wages
Guaranteed payment Cory Matthews office manager
Guaranteed payment other members
Meals and Entertainment
Legal and accounting fees
Office rentals paid
Interest expense on operating line of credit
Liability insurance premium
During the past few years Feeny University has taken advantage of bonus depreciation and 179 deductions and fully remodeled the premises and upgraded its leasehold improvements. This year Feeny wrapped ups its remodeling with the purchase of $82000 of office furniture for which it will claim a 179 deduction. Feeny University uses the same cost recovery methods for both tax and financial purposes. There is no depreciation adjustment for alternative minimum tax purposes.
Feeny 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 July 4 2016 the company purchased 1500 shares of Jules Inc. stock for $130000; it sold those shares on December 6 2016 for $130500. On January 10 2006 Feeny purchased 2500 shares of Bait Inc. stock for $102000; it sold those shares for $106000 on December 6 2016. Both sales were reported by Feenys broker on a 1099-B with basis information. Feeny also sold equipment originally costing $7400 when purchased on February 2 2005 for $3000 on June 15 2016. The equipment had been fully depreciated.
Net income per books is $1521200. The firms activities do no constitute qualified production activities for purposes of the 199 deduction. On January 1 2016 the members capital accounts equalled $365175 each. No additional capital contributions were made in 2016. In addition to their guaranteed payments each member withdrew $350000 cash during the year.
Feenys book balance sheet as of December 31 2016 is as follows.
Leasehold improvements furniture and equipment
Line of credit for operations
Total liabilities and capital
All debt is shared equally by the members. Each member has personally guaranteed the debt of the LLC. The business code for Educational services (including schools colleges & universities) is 611000. The LLCs Form 1065 was prepared by Cory Matthews and sent to the Scranton PA IRS Service Center. All of the members are active in Feeny Universitys operations. Prepare Form 1065 for the partnership with all required supporting forms and schedules. However only prepare Schedule K-1 for Cory Matthews 567 Phillips Road Philadelphia PA 19109. Submit as one PDF as per the instructions.