Leonard and Penny, a Married Couple, Formed the Equally Owned

Multiple Choice

Leonard and Penny, a married couple, formed the equally owned calendar year PL LLC several years ago. Capital is a material income-producing factor for the LLC. On July 1 of this year, they each transferred a 20% interest to their son, Sheldon after the transfer, 40% is owned by Sheldon; Leonard and Penny each retained 30% interests) . For the current tax year, PL reported income of $300,000, which was earned evenly throughout the year. Penny provides uncompensated services to the partnership valued at $100,000; Leonard and Sheldon provide no services. How much income will be allocated to Penny, Leonard, and Sheldon for the year?

A) $300,000 to Penny, $0 to Leonard, $0 to Sheldon.
B) $90,000 to Penny, $90,000 to Leonard, $120,000 to Sheldon.
C) $120,000 to Penny, $120,000 to Leonard, $60,000 to Sheldon.
D) $160,000 to Penny, $60,000 to Leonard, $80,000 to Sheldon.
E) $180,000 to Penny, $80,000 to Leonard, $40,000 to Sheldon.