Final answer:
Shemar will report his share of the LLC's business income and dividends on Schedule E and Form 1040 Line 3b respectively, and his capital gains and losses on Schedule D. Any loss can offset gains, affecting the taxable income reported on his individual Form 1040.
Step-by-step explanation:
Shemar, owning an 80-percent interest in an LLC taxed as a partnership and not involved in the LLC's business management, would report his share of the LLC's income on his individual income tax return using the appropriate forms and schedules.
The net ordinary income of $70,000 from the LLC's business activities will be reported on Schedule E (Form 1040), Part II, as this is where pass-through entity income is typically reported for a member not actively involved in the business.
The qualified dividends of $1,550 would be reported on Form 1040, Line 3b, which is reserved for qualified dividends that are taxed at a lower rate than ordinary income.
For the capital gains and losses, the long-term capital gain of $2,000 and the short-term capital loss of $3,000 would be reported on Schedule D (Form 1040). Short-term capital losses can offset long-term capital gains, which means Shemar would report a net long-term capital gain (after $1,000 of the short-term loss offsets the $2,000 long-term gain).
Shemar's resulting taxable income from the LLC would be calculated by considering these amounts, in conjunction with his other income and deductions, to arrive at an adjusted gross income on his Form 1040. From there, he would proceed with the standard or itemized deduction and exemption calculations to determine his taxable income.