Morgan is a 50% managing member in the calendar year, cash basis MKK LLC. The LLC received $150,000 income from services and paid the following other amounts:
$\begin{array}{lc}
\text { Rent expense } & \$ 10,000 \
\text { Salary expense to employees } & 40,000 \
\text { Payment to Morgan for services, per the operating agreement } & 30,000\
\text { Distributions to partners, Kristin and Katie }&12,000\
\text { Pavment to $ 30 \% $ cash basis partner Katie for tax and accounting services}&10,000
\end{array}$
How much will Morgan's adjusted gross income increase as a result of the above items? What amount will be included in Morgan's selfemployment tax calculation?

Question

Morgan is a 50% managing member in the calendar year, cash basis MKK LLC. The LLC received $150,000 income from services and paid the following other amounts:
 $\begin{array}{lc}
\text { Rent expense } & \$ 10,000 \
\text { Salary expense to employees } & 40,000 \
\text { Payment to Morgan for services, per the operating agreement } & 30,000\
\text { Distributions to partners, Kristin and Katie }&12,000\
\text { Pavment to $ 30 \% $ cash basis partner Katie for tax and accounting services}&10,000
\end{array}$ 
How much will Morgan's adjusted gross income increase as a result of the above items? What amount will be included in Morgan's self­employment tax calculation?

Quizplus · Accepted Answer

The Answer of Morgan is a 50% managing member in the calendar year, cash basis MKK LLC. The LLC received $150,000 income from services and paid the following other amounts:
 $\begin{array}{lc}
\text { Rent expense } & \$ 10,000 \
\text { Salary expense to employees } & 40,000 \
\text { Payment to Morgan for services, per the operating agreement } & 30,000\
\text { Distributions to partners, Kristin and Katie }&12,000\
\text { Pavment to $ 30 \% $ cash basis partner Katie for tax and accounting services}&10,000
\end{array}$ 
How much will Morgan's adjusted gross income increase as a result of the above items? What amount will be included in Morgan's self­employment tax calculation?

Morgan Is a 50% Managing Member in the Calendar Year