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Tax Subject CA-PS6 - California Partnerships

 

The rules and procedures for filing partnership returns can be a bit involved. This California specific 10 hour course will help you review the filing rules and procedures of a California partnership tax return.

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Student Instructions:

Print this page, work on the questions and then submit test by mailing the answer sheet or by completing quiz online.

Instructions to submit quiz online successfully: Step-by-Step check list

Answer Sheet            Quiz Online

Most forms are in Adobe Acrobat PDF format. Get Adobe ReaderYou will need Adobe Reader to view and print these forms. If you do not already have Adobe Reader installed on your computer, you may download the software for free.

 

 

Partnership Return filing situation 1:

The Horse and Carriage Animal Feed Store (EIN 77-8901112) is a partnership between Ramona Kazemi (SSN 504-56-7890), Ross Kazemi (SSN 615-67-8910) and Shirin Delshad (SSN 511-23-4567) that specialize in farm animal feed supply. The partnership address is 36900 Cook Street, Palm Desert, CA  92211. No assets were placed in service in 2012.

Information for Ramona and Ross Kazemi:

Live at 73375 El Paseo Drive, Palm Desert, CA  92260.
Ramona is married to Ross Kazemi and have one child Javad (SSN 623-45-6789 D.O.B. 11/01/2008) living at home with them. All support for the boy comes from Ramona and Ross.

Ramona paid $17,000 in federal estimated payments and another $4,100 in estimated payments to FTB. All payments were made on time every quarter.

Ross paid $12,000 in federal estimated payments and another $2,000 in estimated payments to FTB. All payments were made on time every quarter.

Information for Shirin Delshad:

Lives at 42335 Washington St., Apt 24, Palm Desert, CA  92211

Shirin is single and has no dependents.

Shirin made $20,350 in federal estimated payments and another $4,000 to the FTB. All payments were made on time every quarter.

According to the partnership agreement Ramona has a 40% capital and profits interest, Ross has 20% capital and profits interest, and Shirin has the remaining 40% capital and profits interest. Ramona and Shirin are both active in the business but Ross is not. The partnership has been in operation with the same owners since January 1, 2010. Shirin and the Kazemi family are not related.

The partnership values its inventory using the accrual method and did not have any changes in methods in the current year. Purchases for the year were $157,418.

Cash distributions to partners:

       Ramona...... $54,399.60
       Ross........... $27,199.80
       Shirin.......... $54,399.60

 

You will need the following financial statements to complete this partnership return.

  Horse & Carriage Animal Feed Store    
  Income Statement    
  Year Ended December 31, 2012    
Sales     $460,000
    Cost of Goods Sold   161,692  
      298,308
Expenses:      
    Salaries and Wages   48,182  
    Guarantee Payments      
       Ramona 20,000    
       Ross 10,000    
       Shirin 20,000 50,000  
    Accounting   4,200  
    Advertising   15,316  
    Bad Debts   2,860  
    Bank charges   280  
    Depreciation   15,447  
    Employee Benefit Programs   4,800  
    Freight out   3,250  
    Insurance   2,440  
    Legal and professional fees   1,800  
    Meals and entertainment  (at 50%)

 

 680  
    Office Supplies   490  
    Property Taxes   2,000  
    Taxes and Licenses   4,890  
    Utilities   5,270  
    Other Business deductions   404  
Total Expenses      162,309
Net Income (Loss)     $135,999
      ======

 
  Horse & Carriage Animal Feed Store      
  Balance Sheet      
  As of December 31, 2012      
ASSETS        
Current Assets:        
  Cash       345,821
  Accounts receivable, net       7,000
  Inventory       5,726
  Office supplies on hand           300 
  Total Current Assets       358,847
Long-Lived Assets:        
  Land     60,000  
  Building   250,000    
    Less accum. depreciation   (23,481) 226,519  
  Machinery & equipment   40,000    
    Less accum. depreciation   (26,987) 13,013  
  Total Long-lived Assets       299,532
Total Assets       $658,379
        =====
LIABILITIES        
Current Liabilities:        
  Accounts Payable       4,200
  Notes Payable       15,000
  Interest Payable       1,000
  Wages Payable          800  
  Total Current Liabilities       21,000
Long-Tem Liabilities:        
  Mortgage Payable     130,000  
  Total Long-Term Liabilities       130,000
Total Liabilities       151,000
PARTNERS' CAPITAL        
       Ramona, Capital     202,951.60  
       Ross, Capital     101,475.80  
       Shirin, Capital     202,951.60  
Total Partners' Capital       507,379
Total Liabilities & Owner's Equity       $658,379
        ======

 
  Horse & Carriage Animal Feed Store      
  Balance Sheet      
  As of December 31, 2011      
ASSETS        
Current Assets:        
  Cash       350,000
  Accounts receivable, net       7,000
  Inventory       10,000
  Office supplies on hand           300 
  Total Current Assets       367,300
Long-Lived Assets:        
  Land     60,000  
  Building   250,000    
    Less accum. depreciation   (19,478) 230,522  
  Machinery & equipment   40,000    
    Less accum. depreciation   (15,543) 24,457  
  Total Long-lived Assets       314,979
Total Assets       $682,279
        =====
LIABILITIES        
Current Liabilities:        
  Accounts Payable       3,800
  Notes Payable       15,000
  Interest Payable       1,000
  Wages Payable         1,100  
  Total Current Liabilities       20,900
Long-Tem Liabilities:        
  Mortgage Payable     154,000  
  Total Long-Term Liabilities       154,000
Total Liabilities       174,900
PARTNERS' CAPITAL        
       Ramona, Capital     202,951.60  
       Ross, Capital     101,475.80  
       Shirin, Capital     202,951.60  
Total Partners' Capital       507,379
Total Liabilities & Owner's Equity       $682,279
        ======

 

Partnership Return filing situation 2:

The Saul's Landscaping Arts (EIN 72-3456780) is a partnership between Saul Lopez (SSN 602-34-5670) and Erick Garcia (SSN 532-34-5678) that specialize in garden landscaping arts. The partnership's address is 8200 Stockdale Hwy, Ste M, Bakersfield, CA  93311. Saul has has 50% capital and profits interest and Erick has 50% capital and profits interest. They started business January 1, 2012. Both Saul and Erick were active in the business. They are operating under the cash method of accounting.

Depreciation expense is for a power lawnmower placed in service when they started business on January 1, 2012 (5 year property).

Saul is married to Conchita Perez (SSN 550-12-3454). They live at 4725 Panama Lane, Bakersfield, CA  93313.

They have three children:
Name: Social Security Number Date of Birth
Rosa Lopez 612-34-5678 August 1, 2011
Claudia Lopez 625-67-5901 September 30, 2010
Lucrecia Lopez 621-23-4567 March 3, 2005

In addition to the partnership income, Saul received the following Form W-2:

 

Erick lives with his girlfriend but he is not married. They have a child together, whom Erick totally supports. Juan Garcia (SSN 627-89-1011 DOB June 6, 2012). Their address 4208 Rosedale Ave, Apt 39, Bakersfield, CA  93308. Erick is 26 years old.

 

You will need the following financial statements to complete this partnership return.

  Saul's Landscaping Arts    
  Income Statement    
  Year Ended December 31, 2012    
Revenues:      
    Landscaping Fees   40,075  
    Finance charge income   100  
Total Revenue     40,175
Expenses:      
    Repairs and Maintenance   2,200  
    Rent   6,000  
    Taxes and Licenses   600  
    Bank charges   204  
    Depreciation   1,658  
    Insurance   849  
    Legal and professional fees   600  
    Office Supplies   490  
    Property Taxes   140  
    Utilities   5,270  
Total Expenses      18,011
Net Income (Loss)     $22,164
      ======

 
  Saul's Landscaping Arts      
  Balance Sheet      
  As of December 31, 2012      
ASSETS        
Current Assets:        
  Cash       52,432
  Accounts receivable, net       4,350
  Total Current Assets       56,782
Long-Lived Assets:        
  Machinery & equipment   8,290    
    Less accum. depreciation   (1,658) 6,632  
  Total Long-lived Assets       6,632
Total Assets       $63,414
        =====
LIABILITIES        
Current Liabilities:        
  Accounts Payable       750
  Notes Payable       1,500
  Total Current Liabilities       2,250
Long-Tem Liabilities:        
  Loan Payable     9,000  
  Total Long-Term Liabilities       9,000
Total Liabilities       11,250
         
PARTNERS' CAPITAL        
       Saul, Capital     26,082  
       Erick, Capital     26,082  
Total Partners' Capital       52,164
Total Liabilities & Owner's Equity       $63,414
        ======

 
  Saul's Landscaping Arts      
  Statement of Partner's Equity      
  December 31, 2012      
    Saul Lopez Erick Garcia Total
    Capital Capital Capital
Partner Capital January 1, 2012   $25,000 $25,000 $50,000
  Year-to-date net income   11,082 11,082 22,164
  Partner draws   (10,000) (10,000) 20,000
Partner Capital December 31, 2012   26,082 26,082 52,164
    ===== ===== =====

 

Answer the following questions as accurate as possible. Please pay attention to your answers as they will appear again on the "Quiz Online" part of this topic. Prepare your answers for these questions and then click on "Assignment" online in step 3 above when you are ready to submit them.

 

1. Look at the Form 1065 you prepared for the Horse and Carriage Partnership. What is the amount on Line 20?

A. $34,130
 B. $162,309
 C. $4,800
 D. None of the above

2. Look at the Form 1065 you prepared for the Horse and Carriage Partnership. What is on Schedule B Line 3b?

A. No
 B. Yes
 C. None of the partners owned more than 50%.
D. Schedule B is not necessary.

3. Look at the Form 1065 you prepared for the Horse and Carriage Partnership. What is on Schedule B Line 6d?

A. No
 B. Yes
 C. The partnership is filing Schedule M3 instead.
D. Schedule B is not necessary.

4. Look at the Form 1065 you prepared for the Horse and Carriage Partnership. What amount is on Schedule K Line 1?

A. $185,999
 B. $27,000
 C. $135,999
D. None of the above

5. Look at the Form 1065 you prepared for the Horse and Carriage Partnership. What amount is on Schedule K Line 14a?

A. $185,999
 B. $29,237
 C. $135,999
D. None of the above

6. Look at the Form 1065 you prepared for the Horse and Carriage Partnership. What names did you enter on Schedule B-1 Part II for Individuals or Estates Owning 50% or More of the Partnership?

A. Ramona
 B. Shirin
 C. Ramona and Ross
D. None of the individuals owned more than 50%.

 

7. Look at the Form 1065 you prepared for the Horse and Carriage Partnership. What amount is on Form 4562 Line 17?

A. $0
 B. $15,447
 C. $35,021
D. There is no such form for a partnership.

8. Look at the Form 1065 you prepared for the Horse and Carriage Partnership. What amount is on Form 1125-A Line 6?

A. $10,000
 B. $157,418
 C. $167,418
 D. Form 1125-A is not required.

9. Look at the Form 1065 you prepared for the Horse and Carriage Partnership. What amount is on Ross Kazemi's Schedule K-1 Line 14?

A. $27,200
 B. $10,000
 C. $37,200
D. None of the above

10. Look at the Form 565 you prepared for the Horse and Carriage Partnership. What amount is on Line 2?

A. $460,000
 B. $161,692
 C. $298,308
 D. None of the above

11. Look at the Form 565 you prepared for the Horse and Carriage Partnership. What amount is on Line 14?

A. $48,182
 B. $50,000
 C. $2,860
D. None of the above

12. Look at the Form 565 you prepared for the Horse and Carriage Partnership. What amount is on Line 17c?

A. $15,447
 B. $26,987
 C. $35,021
D. $23,481

13. Look at the Form 565 you prepared for the Horse and Carriage Partnership. What amount is on Line 21?

A. $34,180
 B. $6,890
 C. $41,020
 D. None of the above

14. Look at the Form 565 you prepared for the Horse and Carriage Partnership. What amount is on Line 23?

A. $162,309
 B. $135,999
 C. $800
D. None of the above

15. Look at the Form 565 you prepared for the Horse and Carriage Partnership. What amount is on Line 28?

A. $12,309
 B. $7,854
 C. $800
 D. None of the above

16. Look at the Form 565 you prepared for the Horse and Carriage Partnership. What amount is on Schedule A Line 2?

A. $157,418
 B. $167,418
 C. $161,692
D. None of the above

17. Look at the Form 565 you prepared for the Horse and Carriage Partnership. What amount is on Schedule K Line 4d?

A. $135,999
 B. $50,000
 C. $25,000
D. None of the above

18. Look at the Form 565 you prepared for the Horse and Carriage Partnership. What amount is on Schedule K Line 21b(ii)?

A. $185,999
 B. $148,799
 C. $37,200
D. None of the above

19. Look at the Form 565 you prepared for the Horse and Carriage Partnership. What amount is on Schedule L Line 22b?

A. $658,379
 B. $682,279
 C. $135,999
D.  Schedule L is not required.

20. Look at the Form 565 you prepared for the Horse and Carriage Partnership. What amount is on Schedule M-1 Line 9?

A. $135,999
 B. $50,000
 C. $185,000
D. Schedule M-1 is not required.

21. Look at the Form 565 you prepared for the Horse and Carriage Partnership. What amount is on Schedule M-2 Line 9?

A. $135,999
 B. $507,379
 C. $643,378
D. Schedule M-2 is not required.

22. Look at the Form 565 you prepared for the Horse and Carriage Partnership. Of the 3 Schedule K-1 (Form 565) for Shirin that you prepared, what amount is on Line 1e?

A. $135,999
 B. $50,000
C. $54,400
D. $74,400

 

23. Look at the Form 540 you prepared for Ross and Ramona. What is the amount on Line 19?

A. $130,217
 B. $122,535
C. $7,682
D. None of the above

24. Look at the Form 540 you prepared for Ross and Ramona. What is the amount on Line 115?

A. $6,073
 B. $6,100
C. $101
D. None of the above

25. Look at the Schedule E (Form 1040) you prepared for Shirin. What is the amount on Line 41?

A. $74,400
 B. $20,000
C. $139,999
D. None of the above

26. Look at the Form 540 you prepared for Shirin. What is the amount on Line 115?

A. $3,572
 B. $428
 C. $4,000
D. None of the above

27. Look at the Schedule SE (Form 1040) you prepared for Shirin. What is the amount on Line 5?

A. $9,138
 B. $8,315
C. $68,708
D. None of the above

28. Look at the Schedule SE (Form 1040) you prepared for Shirin. What is the amount on Line 6?

A. $1,000
 B. $5,256
C. $8,000
D. $9,138

29. Look at the Form 1040 you prepared for Shirin. What is the amount on Line 36?

A. $74,400
 B. $5,256
C. $69,144
D. None of the above

30. Look at the Form 1040 you prepared for Shirin. What is the amount on Line 37?

A. $74,400
 B. $20,000
C. $54,400
D. $69,144

31. Look at the Form 1040 you prepared for Shirin. What is the amount on Line 55?

A. $10,874
 B. $9,138
 C. $20,012
D. $20,350

32. Look at the Form 1040 you prepared for Shirin. What is the amount on Line 56?

A. $10,874
 B. $9,138
C. $20,012
D. $20,350

33. Look at the Form 1040 you prepared for Shirin. What is the amount on Line 73?

A. $1,900
 B. $171
C. $338
D. None of the above.

34. Look at the Form 1065 you prepared for Saul's Landscaping Arts Partnership. What is the amount on Line 8?

A. $40,075
 B. $40,175
C. $22,164
D. None of the above.

35. Look at the Form 1065 you prepared for Saul's Landscaping Arts Partnership. What is the amount on Line 14?

A. $740
 B. $140
C. $600
D. None of the above.

36. Look at the Form 1065 you prepared for Saul's Landscaping Arts Partnership. What is the amount on Line 16c?

A. $871
 B. $1,658
C. $2,553
D. None of the above.

37. Look at the Form 1065 you prepared for Saul's Landscaping Arts Partnership. What is the amount on Line 20?

A. $2,612
 B. $3,100
C. $7,413
D. $0

38. Look at the Form 1065 you prepared for Saul's Landscaping Arts Partnership. What is the amount on Line 22?

A. $22,164
 B. $18,011
 C. $2,612
 D. None of the above.

39. Look at the Form 1065 you prepared for Saul's Landscaping Arts Partnership. What is the amount on Schedule B Line 3b?

A. No
 B. Yes
C. Nothing.
D. Schedule B is not required.

40. Look at the Form 1065 you prepared for Saul's Landscaping Arts Partnership. What is the amount on Schedule B Line 6d?

A. No
 B. Yes
C. Nothing.
D. Schedule B is not required.

41. Look at the Form 1065 you prepared for Saul's Landscaping Arts Partnership. What is the amount on Schedule K Line 1?

A. $22,164
 B. $55,924
C. $11,082
D. None of the above

42. Look at the Form 1065 you prepared for Saul's Landscaping Arts Partnership. What is the amount on Schedule K Line 4?

A. $22,164
 B. $11,082
C. $7,129
D. $0

43. Look at the Form 1065 you prepared for Saul's Landscaping Arts Partnership. What is the amount on Schedule K Line 14a?

A. $22,164
 B. $26,118
C. $19,558
D. None of the above

44. Look at the Form 1065 you prepared for Saul's Landscaping Arts Partnership. What is the amount on Analysis of Net Income (Loss) line 1?

A. $22,164
 B. $3,992
C. $12,396
D. $0

45. Look at the Form 1065 you prepared for Saul's Landscaping Arts Partnership. What is the amount on Analysis of Net Income (Loss) line 2a(ii)?

A. $22,164
 B. $26,143
C. $19,875
D. None of the above

46. Look at the Form 1065 you prepared for Saul's Landscaping Arts Partnership. What is the amount on Schedule L Line 14?

A. $63,414
 B. $52,164
C. $52,432
D. Schedule L is not required.

47. Look at the Form 1065 you prepared for Saul's Landscaping Arts Partnership. What is the amount on Schedule M-1 Line 9?

A. $22,164
 B. $9,840
C. $13,846
D. Schedule M-1 is not required.

48. Look at the Form 1065 you prepared for Saul's Landscaping Arts Partnership. What is the amount on Schedule M-2 Line 9?

A. $52,164
 B. $22,164
C. $20,000
D. Schedule M-2 is not required.

49. Look at the Form 4562 you prepared for Saul's Landscaping Arts Partnership. What is the amount on Line 19b(g)?

A. $1,658
 B. $8,290
C. $6,632
D. None of the above

50. Look at the Form 4562 you prepared for Saul's Landscaping Arts Partnership. What is the amount on Line 22?

A. $1,658
 B. $8,290
C. $6,632
D. None of the above

51. Look at the Form 1065 you prepared for Saul's Landscaping Arts Partnership. What is the amount on Saul's Schedule K-1 Line 11?

A. $22,164
 B. $11,082
 C. $25,000
D. None of the above

52. Look at the Form 1065 you prepared for Saul's Landscaping Arts Partnership. What is the amount on Saul's Schedule K-1 Line 4?

A. $22,164
 B. $11,082
 C. $0
D. None of the above

53. Look at the Form 1065 you prepared for Saul's Landscaping Arts Partnership. What is the amount on Saul's Schedule K-1 Line 14?

A. $22,164
 B. $11,082
 C. $0
D. None of the above

54. Look at the Form 1065 you prepared for Saul's Landscaping Arts Partnership. What is the amount on Erick's Schedule K-1 Line 1?

A. $22,164
 B. $11,082
 C. $0
D. None of the above

55. Look at the Form 1065 you prepared for Saul's Landscaping Arts Partnership. What is the amount on Erick's Schedule K-1 Line 4?

A. $22,164
 B. $11,082
 C. $0
D. None of the above

56. Look at the Form 1065 you prepared for Saul's Landscaping Arts Partnership. What is the amount on Erick's Schedule K-1 Line 14?

A. $22,164
 B. $11,082
 C. $0
D. None of the above

 

57. Look at the Form 565 you prepared for Saul's Landscaping Arts Partnership. What is the amount on Line 1c?

A. $22,164
 B. $40,175
 C. $40,075
D. None of the above

58. Look at the Form 565 you prepared for Saul's Landscaping Arts Partnership. What is the amount on Line 12?

A. $22,164
 B. $40,175
 C. $40,075
D. None of the above

59. Look at the Form 565 you prepared for Saul's Landscaping Arts Partnership. What is the amount on Line 21?

A. $16,353
 B. $18,011
 C. $22,164
D. None of the above

60. Look at the Form 565 you prepared for Saul's Landscaping Arts Partnership. What is the amount on Line 32?

A. $2,200
 B. $800
 C. $0
 D. None of the above

61. Look at the Form 565 you prepared for Saul's Landscaping Arts Partnership. What is the amount on Schedule A Line 8?

A. $122,164
 B. $11,082
 C. $100
D. There is no inventory.

62. Look at the Form 565 you prepared for Saul's Landscaping Arts Partnership. What is the amount on Schedule K line 1d?

A. $22,164
 B. $11,082
 C. $63,237
D. None of the above

63. Look at the Form 565 you prepared for Saul's Landscaping Arts Partnership. What is the amount on Schedule K line 4?

A. $22,164
 B. $20,000
 C. $0 
D. None of the above

64. Look at the Form 565 you prepared for Saul's Landscaping Arts Partnership. What is the amount on Schedule L line 22d?

A. $22,000
 B. $63,414
 C. $29,237
D. Schedule L is not required.

65. Look at the Form 565 you prepared for Saul's Landscaping Arts Partnership. What is the amount on Schedule M-1 line 9?

A. $22,164
 B. $161,718
 C. $151,718
D. Schedule M-1 is not required.

66. Look at the Form 565 you prepared for Saul's Landscaping Arts Partnership. What is the amount on Schedule M-2 line 9?

A. $22,164
 B. $160,484
 C. $173,100
D. Schedule M-2 is not required.

67. Look at the Form 565 you prepared for Saul's Landscaping Arts Partnership. What is the amount on Saul's Schedule K-1 Line 1(e)?

A. $22,164
 B. $11,082
 C. $25,000
D. Schedule K-1 is not required.

68. Look at the Form 565 you prepared for Saul's Landscaping Arts Partnership. What is the amount on Saul's Schedule K-1 Line 4?

A. $10,000
 B. $2,130
 C. $3,704
D. There are no guaranteed payments.

69. Look at the Form 565 you prepared for Saul's Landscaping Arts Partnership. What is the amount on Erick's Schedule K-1 Line 1(e)?

A. $22,164
 B. $11,082
 C. $123
D. Schedule K-1 is not required.

70. Look at the Form 565 you prepared for Saul's Landscaping Arts Partnership. What is the amount on Saul's Schedule K-1 Line 4?

A. $10,000
 B. $30,157
 C. $29,237
D. There are not guaranteed payments.

71. Look at the Form 540 you prepared for Saul. What is the amount on Line 12?

A. $12,265
 B. $22,564
 C. $2,711
D. $0

72. Look at the Form 540 you prepared for Saul. What is the amount on Line 19?

A. $22,564
 B. $5,000
C. $14,882
D. $0

 

73. Look at the Form 540 you prepared for Saul. What is the amount on Line 115?

A. $63
 B. $12
C. $27
D. None of the above

74. Look at the Form 1040 you prepared for Saul. What is the amount on Line 37?

A. $12,265
 B. $11,082
C. $23,347
D. $22,564

75. Look at the Form 1040 you prepared for Saul. What is the amount on Line 56?

A. $1,361
 B. $3,551
C. $0
D. None of the above

76. Look at the Schedule E you prepared for Saul. What is the amount on Line 32?

A. $10,000
 B. $11,082
 C. $22,164
D. None of the above

77. Look at the Form 1040 you prepared for Saul. What is the amount on Line 73?

A. $6,290
 B. $1,315
C. $3,551
D. None of the above

78. Look at the Form 540 you prepared for Erick. What is the amount on Line 19?

A. $1,000
 B. $2,617
 C. $811
D. None of the above

79. Look at the Form 1040 you prepared for Erick. What is the amount on Line 64a?

A. $5,000
 B. $3,000
C. $2,292
D. None of the above

80. Look at the Form 1040 you prepared for Erick. What is the amount on Line 73?

A. $931
 B. $3,000
C. $2,292
D. $0

Please Note:  If you filled out the answers directly on this page, please print this page or write down the answers before you proceed to submit them by clicking on "Assignment" in step 3 above.

 
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