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: $\begin{array}{l}
\begin{array}{lr}
\text { Rent expense } & \$ 10,000 \
\text { Salary expense to employees } & 40,000 \
\text { Payment to Morgan for services, per the operating agreement } & 40,000 \
\text { Distributions to partners, Kristin and Katie } & 12,000 \
\text { Payment to 30\% cash basis partner Katie for tax and accounting } & 10,000
\end{array}\
\text { services }
\end{array}$
How much will Morgan's adjusted gross income increase as a result of the above items? What amount will be included in Morgan's self-employment 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: $\begin{array}{l}
\begin{array}{lr}
\text { Rent expense } & \$ 10,000 \
\text { Salary expense to employees } & 40,000 \
\text { Payment to Morgan for services, per the operating agreement } & 40,000 \
\text { Distributions to partners, Kristin and Katie } & 12,000 \
\text { Payment to 30\% cash basis partner Katie for tax and accounting } & 10,000
\end{array}\
\text { services }
\end{array}$ ​
How much will Morgan's adjusted gross income increase as a result of the above items? What amount will be included in Morgan's self-employment 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: $\begin{array}{l}
\begin{array}{lr}
\text { Rent expense } & \$ 10,000 \
\text { Salary expense to employees } & 40,000 \
\text { Payment to Morgan for services, per the operating agreement } & 40,000 \
\text { Distributions to partners, Kristin and Katie } & 12,000 \
\text { Payment to 30\% cash basis partner Katie for tax and accounting } & 10,000
\end{array}\
\text { services }
\end{array}$ ​
How much will Morgan's adjusted gross income increase as a result of the above items? What amount will be included in Morgan's self-employment tax calculation?

Morgan Is a 50% Managing Member in the Calendar Year