Aaron, Deanne, and Keon formed the Blue Bell General Partnership at the beginning of the 2022. Aaron and Deanne each contributed $154,000, and Keon transferred an acre of undeveloped land to the partnership. The land had a tax basis of $76,600 and was appraised at $224,000. The land was also encumbered with a $76,600 nonrecourse mortgage for which no one was personally liable. All three partners agreed to split profits and losses equally. At the end of the first year, Blue Bell made a $11,400 principal payment on the mortgage. For the first year of operations, the partnership records disclosed the following information: Sales revenue $ 536,000 Cost of goods sold 445,200 Operating expenses 105,200 Long-term capital gains 3,060 §1231 gains 600 Charitable contributions 300 Municipal bond interest 300 Salary paid as a guaranteed payment to Deanne (not included in expenses) 3,000 Compute the adjusted basis of each partner's interest in the partnership immediately after the formation of the partnership. List the separate items of partnership income, gains, losses, and deductions that the partners must show on their individual income tax returns that include the results of the partnership's first year of operations. 3. What are the partners' adjusted basis in their partnership interests at the end of the first year of operations?
Aaron, Deanne, and Keon formed the Blue Bell General Partnership at the beginning of the 2022. Aaron and Deanne each contributed $154,000, and Keon transferred an acre of undeveloped land to the partnership. The land had a tax basis of $76,600 and was appraised at $224,000. The land was also encumbered with a $76,600 nonrecourse mortgage for which no one was personally liable. All three partners agreed to split profits and losses equally. At the end of the first year, Blue Bell made a $11,400 principal payment on the mortgage. For the first year of operations, the partnership records disclosed the following information: Sales revenue $ 536,000 Cost of goods sold 445,200 Operating expenses 105,200 Long-term capital gains 3,060 §1231 gains 600 Charitable contributions 300 Municipal bond interest 300 Salary paid as a guaranteed payment to Deanne (not included in expenses) 3,000 Compute the adjusted basis of each partner's interest in the partnership immediately after the formation of the partnership. List the separate items of partnership income, gains, losses, and deductions that the partners must show on their individual income tax returns that include the results of the partnership's first year of operations. 3. What are the partners' adjusted basis in their partnership interests at the end of the first year of operations?
Chapter13: Comparative Forms Of Doing Business
Section: Chapter Questions
Problem 54P
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Question
Aaron, Deanne, and Keon formed the Blue Bell General
| Sales revenue | $ 536,000 |
|---|---|
| Cost of goods sold | 445,200 |
| Operating expenses | 105,200 |
| Long-term |
3,060 |
| §1231 gains | 600 |
| Charitable contributions | 300 |
| Municipal bond interest | 300 |
| Salary paid as a guaranteed payment to Deanne (not included in expenses) | 3,000 |
- Compute the adjusted basis of each partner's interest in the partnership immediately after the formation of the partnership.
- List the separate items of partnership income, gains, losses, and deductions that the partners must show on their individual income tax returns that include the results of the partnership's first year of operations.
3. What are the partners' adjusted basis in their partnership interests at the end of the first year of operations?
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