-Form 1065 -Related statement/schedule and forms -Form4562 -Form 8949 -schedule D -Schedule K-1 for all LLC members -transmittal letter to Ryan Trek that will be transmitted to the partner with their schedule K-1/n Trek Engineering Financial Statements-Cash Basis 12/31/2023 Consulting Revenues Interest Income Bank of America Interest from City of Tustin Bonds Treasury Note Interest 12,750,000 15,000 35,000 50,000 Net Loss from Sale of Stock 75,500 Capital Gaim Distributions-Long Term 100,000 Ordinary Dividends 75,000 Qualified Dividends Total Revenue Guaranteed Payments 25,000 13,125,500 6,000,000 W-2 Wages 2,000,000 Advertising 350,000 Charitable Contributions 96,000 Depreciation ** 540,000 Repairs and Maintenance 50,000 Premiums for Life Insurance (Partnership is Beneficiary) 75,000 Interest Expense-Line of Credit 50,000 Guaranteed Payment to Trek for Capital 250,000 Legal and Accounting Fees* 130,000 Meals 225,000 Travel 300,000 Entertainment 350,000 Insurance Office Rent Office Expense 52,000 175,000 200,000 Payroll Taxes 150,000 Employee Benefits 125,000 Lobbying Expenses-Congressman George 12,500 Utilities 54,300 Political Contributions 35,000 Total Expenses 11,219,800 Book Income 1,905,700 * Includes $50,000 Legal Fees from a failed acquisition of another engineering company and $20,000 for a failed acquisition of a contruction Co. ** Assume Section 179 Cash Marketable Securities Office Equipment Accumulated Depreciation Total Assets Line of Credit Loan from Wang Capital Account-Trek Capital Account-Shatner Capital Account-Nimoy Capital Account-Kelly Total Liabilities and Equity 12/31/2022 1,900,000 500,000 960,000 12/31/2023 TBD 1,250,000 1,500,000 (960,000) (1,500,000) 2,400,000 TBD 1,000,000 1,000,000 350,000 TBD 350,000 TBD 350,000 TBD 350,000 TBD 2,400,000 TBD/n Practice Set #2 Partnership Tax Return Ryan Trek (111-11-1112), Bill Shatner (222-22-2223), Lee Nimoy (333-33-3334), and Dee Kelly (444-44-4445) are equal and unrelated members in Trek Engineering LLC (Trek). Dee Kelly is NOT an active member in the partnership. He is Trek's friend that invested in the partnership. He states he is a doctor and not an engineer. Trek is an engineering services for clients that help clients with energy issues in the Irvine area. The LLC's Federal ID number is 55-5555556. It uses the cash basis and the calendar year and began operations on January 1, 2007. Its current address is 2501 Sand Canyon Blvd., Suite 2100, Irvine, CA 92602. The financial information enclosed from the LLC's income statement for the current year. This year, Trek wrapped up its remodel with the purchase of $540,000 of office furniture for which it will claim a § 179 deduction. (For simplicity, assume that the Company uses the same cost recovery methods for both tax and financial purposes.) There is no depreciation adjustment for alternative minimum tax purposes. Trek invests much of its excess cash in dividend-paying stocks, mutual funds, treasuries, and tax- exempt securities. During the year, the LLC several securities transactions. On May 15, purchased 1,000 shares of Scotty, Inc. stock for $200,000; it sold those shares on December 31 for $165,000. On March 15 of last year, Trek purchased 3,000 shares of Chekov Machinery, Inc. stock for $189,000; it sold those shares for $299,500 on December 15 of the current year. These transactions were NOT reported to the IRS on Forms 1099–B; Treks' basis in these shares was reported so form. Each active member received an equal guaranteed payment for services rendered. Trek received a guaranteed payment of $250,000 for the additional $2,000,000 of capital invested. He invested the additional capital in 2023. Net income per books is $1,905,700. On January 1, the members' capital accounts equaled $350,000. In addition to their guaranteed payments, each member withdrew $300,000 cash during the year. All contributions and distributions have been in cash, so the LLC has no net unrecognized § 704(c) gain or loss. The LLC's balance sheet as of December 31 of this year is also enclosed. All debt is shared equally by all members. Each active member has personally guaranteed the line of credit debt of the LLC. All active members are participating in the Trek operations. For our purposes, assume that Treks' operations constitute one active trade or business for purposes of the passive activity and at-risk limitations. The appropriate business code for the entity is 237310. For the Form 1065, page 5, Analysis of Net Income, put all partners' allocations in cell 2(b)(ii), per IRS instructions for an LLC. REQUIRED 1) Prepare a 2023 federal Form 1065, pages 1, 4, and 5, for Trek Engineering LLC using tax basis information for Schedules L and M-2. Use the Intuit Pro connect software provided to you in Canvas to prepare Form 1065 Forms 4562, 8949, and Schedule D and any other forms you think are necessary. DO NOT PREPARE THE STATE TAX RETURNS 2) Prepare Schedule K−1 for all LLC members. Use any address for the partners. 3) You need to prepare an explanation write up on how you treated the items is the facts above. The explanation is meant to determine if you understand the 1065 assignment. Please explain how you determined what is taxable, not taxable, deductible, or not deductible. Use the appropriate authorities to document your conclusions. Also, provide detail computations of your book/tax differences and computation of taxable income. Finally, please provide a computation each partner's tax basis (assume the beginning capital account is the opening tax basis) and document the tax consequences of all transactions between the members and LLC. If the facts aren't in the case, please make your own assumptions and document them. Prepare this is in a tax memorandum format and it should be single-spaced. 4) Prepare a transmittal letter to Ryan Trek that will be transmitted to the partner with their schedule K-1. This assignment is worth 100 points LATE ASSIGNMENTS WILL BE ACCEPTED.

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-Form 1065 -Related statement/schedule and forms -Form4562 -Form 8949 -schedule D -Schedule K-1 for all LLC members -transmittal letter to Ryan Trek that will be transmitted to the partner with their schedule K-1/n Trek Engineering Financial Statements-Cash Basis 12/31/2023 Consulting Revenues Interest Income Bank of A