a.How much interest expense can CL deduct? b.How is the interest expense reported on CL’s Schedule K? c.What action, if any, is needed by the LLC members?
CL LLC is a manufacturing business and reported taxable income of $40,000,000 before interest expense, taxes,
a.How much interest expense can CL deduct?
b.How is the interest expense reported on CL’s Schedule K?
c.What action, if any, is needed by the LLC members?
d.How would your answers to parts (a) through (c) change if CL’s tax EBITDA was $4,000,000 (plus $150,000 of investment income), its average annual gross receipts for all prior tax years was $10,000,000 or less, and the interest expense amounts were $100,000 (investment) and $1,400,000 (business)?
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