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

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

Morgan Is a 50% Managing Member in the Calendar Year