Question: An LLC partnership that is an architectural firm has three partners: one is just a capital investor, one is the managing partner and the…

Question:An LLC partnership that is an architectural firm has three partners: one is just a capital investor, one is the managing partner and the other one is the architect of the firm. Both the managing partner and the head architect of the firm would like to be treated as employees of the partnership and to pay each a salary of $200,000. In addition, the three LLC members have agreed to share profits and losses equally and expect business net ordinary income for the current year to be $300,000. Each will take cash distributions of $40,000. The members assume that they will not be subject to any self-employment taxes on either their share of the profits or their distributions. What is the self-employment tax basis for each partner of the LLC company?

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