American River College
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ACCT
•
ACCT-128
Partnership Tax Return Problem--AAA Fast Plumbing
Required:
Please complete AAA Fast Plumbing's 2022 tax return based on the facts presented below. If required information is missing, use reasonable assumptions to fill in the gaps. Ignore all AMT calculations and AMT-related reporting items.
Facts:
Michael Rodriguez and Dev
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American River College
•
ACCT
•
ACCT-128
Partnership Tax Return Problem--AAA Fast Plumbing
Required:
Please complete AAA Fast Plumbing's 2022 tax return based on the facts presented below. If required information is missing, use reasonable assumptions to fill in the gaps. Ignore all AMT calculations and AMT-related reporting items.
Facts:
Michael Rodriguez and Devontae Johnson have been lifelong friends. Both Michael and Devontae started to work for the same national plumbing repair company immediately after graduating from a technical college. After nearly a decade of working for that same company, Michael and Devontae decided to venture out on their own and form their own plumbing company called AAA Fast Plumbing Repair (AAA). They formed AAA as a limited liability company (LLC). Michael and Devontae each own 50% of the company. The company has been successful primarily based on reputation and the fact that AAA is available 24 hours a day, seven days a week. Although AAA charges a premium for after-normal business hour calls, most of its competitors will not perform services past 9 p.m. and, thus, AAA finds itself often as one of the only available choices for middle-of-the-night emergencies.
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