Kira buys a 40% partnership interest from Flash for $100,000. Flash's outside basis in the partnershipwas $60,000 at the time of sale, and Flash's share of the inside basis of the assets in the partnership (histax capital account) was $40,000. The partnership has $20,000 of debt. What is Kira's outside basis inthe partnership interest?a. $48,000b. $100,000c. $108,000d. $40,000

The outside basis in the partnership is inside basis [ share in assets of…

Answered: Kira buys a 40% partnership interest…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Heather sells land (adjusted basis, $75,000; fair market value, $85,000) to a partnership in which she controls an 80% capital interest. The partnership pays her only $50,000 for the land. a. How much loss does Heather realize and recognize? b. If the partnership later sells the land to a third party for $80,000, how much gain does that partnership realize and recognize?
John has a $24,000 basis in his partnership interest. He receives a current distribution of $4,000 cash, accounts receivable ($12,000 A/B. $16.000 FMV) and land ($3,000 A/B, $8.000 FMV) The basis of his partnership interest following the distribution is Selected Answer: Ⓒa. 50 Answers: 0.50 b. $5,000 c. $1,000 d. ($4,000) D
Jason owns stock (basis $4,400), land (basis $2,300), and a partnership interest (basis $15,700). In the current year, Jason decides to sell the land for $3,800 and the partnership interest for $20,100. What is Jason's reportable income? Reportable income +A $ 23,900
Renata sold her interest in a partnership for $31,000 cash when her outside basis was $18,000. She was relieved of her $29,000 share of partnership liabilities. What is Renata's realized value from the sale of her partnership interest? $31,000 $42,000 $47,000 $60,000
Mary is a 25% partner. She is to receive 25% of the partnership income, but no less than $10,000. If the net income of the partnership is %50,000, what amount can the partnership deduct as a guaranteed payment to Mary? (a) $0, (b) $2,500, (c) $10,000, (d) $12,500
23.Carolina and Alfonso form TikTuk general partnership. Each person receives an equal interest in the newly created partnership. Carolina contributes $15,000 of cash and land with an FMV of $60,000. Her basis in the land is $25,000. Alfonso contributes equipment with an FMV of $18,000 and a building with an FMV of $27,000. His basis in the equipment is $6,000, and his basis in the building is $12,000. How much gain must the TikTuk general partnership recognize on the transfer of these assets from Carolina and Alfonso? Explain your answer
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Peters and Chong are partners and share equally in income or loss. Peters' current capital balance is $150,000 and Chong's is $140,000. Peters and Chong agree to accept Aaron with a 30% interest in the partnership. Aaron invests $118,000 in the partnership. The amount credited to Aaron's capital account is: Multiple Choice $122,400. $118,000. $268,000. $80,400. $128,000.
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Liam, Michael and Noah own interests in the LMN Partnership. Their current capital account balances are as follows: Liam $450,000 Michael 350,000 Noah 200,000 Partnership income is shared in a 1:5:4 ratio. Olivia buys a 20% interest in the partnership by acquiring 20% of each existing partner's interest, paying the three partners a total of $300,000. Partnership identifiable net assets are currently reported at amounts approximating fair value. Using the recognition of implied goodwill approach, implied goodwill is: Select one: a. $500,000 b. $800,000 c. $300,000 d. $100,000
Natasha contributes land to the newly formed Romanoff Partnership in exchange for a 40% interest. The land's adjusted basis and fair market value is $540,000. It is subject to a $200,000 liability, assumed by the partnership. At year end the partnership’s accounts payable are $120,000 and the assumed debt liability is $180,000. Romanoff opened a $300,000 line of credit but did not draw on the line. To secure the line of credit, each partner had to contribute an additional $30,000. All liabilities are allocated proportionately. The partnership’s income is $500,000. Romanoff distributed $113,000 to Natasha. What is her ending outside basis?

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