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ACCT 540 Assignment 8 Mary and Todd form the MT Partnership, with a transfer of the following properties: Mary $2,000,000 cash Todd $2,000,000 FMV property $1,400,000 tax basis Both Mary and Todd receive a 50% interest in the partnership. They have an agreement that allocates all profits and losses 50% to each member. They also have language in their partnership agreement that satisfies the alternate test for economic effect. REQUIRED: 1. Show the book (704b) and tax basis capital account entries for both Mary and Todd at formation of the partnership. 2. Assume that Todd's contributed property is later sold for $ 2,800,000. No depreciation deductions were claimed. Show the allocation of the book and tax gain from this sale, and explain which one will be reflected on the tax return of the partnership. YOU MUST SHOW CAPITAL ACCOUNTS USING THE SAME FORMAT AS I USED ON THE VIDEO

ACCT 540 Assignment 8 Mary and Todd form the MT Partnership, with a transfer of the following properties: Mary $2,000,000 cash Todd $2,000,000 FMV property $1,400,000 tax basis Both Mary and Todd receive a 50% interest in the partnership. They have an agreement that allocates all profits and losses 50% to each member. They also have language in their partnership agreement that satisfies the alternate test for economic effect. REQUIRED: 1. Show the book (704b) and tax basis capital account entries for both Mary and Todd at formation of the partnership. 2. Assume that Todd's contributed property is later sold for $ 2,800,000. No depreciation deductions were claimed. Show the allocation of the book and tax gain from this sale, and explain which one will be reflected on the tax return of the partnership. YOU MUST SHOW CAPITAL ACCOUNTS USING THE SAME FORMAT AS I USED ON THE VIDEO

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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ACCT 540 Assignment 8 Mary and Todd form the MT Partnership, with a transfer of the following properties: Mary $2,000,000 cash Todd $2,000,000 FMV property $1,400,000 tax basis Both Mary and Todd receive a 50% interest in the partnership. They have an agreement that allocates all profits and losses 50% to each member. They also have language in their partnership agreement that satisfies the alternate test for economic effect. REQUIRED: 1. Show the book (704b) and tax basis capital account entries for both Mary and Todd at formation of the partnership. 2. Assume that Todd's contributed property is later sold for $ 2,800,000. No depreciation deductions were claimed. Show the allocation of the book and tax gain from this sale, and explain which one will be reflected on the tax return of the partnership. YOU MUST SHOW CAPITAL ACCOUNTS USING THE SAME FORMAT AS I USED ON THE VIDEO
Transcribed Image Text:ACCT 540 Assignment 8 Mary and Todd form the MT Partnership, with a transfer of the following properties: Mary $2,000,000 cash Todd $2,000,000 FMV property $1,400,000 tax basis Both Mary and Todd receive a 50% interest in the partnership. They have an agreement that allocates all profits and losses 50% to each member. They also have language in their partnership agreement that satisfies the alternate test for economic effect. REQUIRED: 1. Show the book (704b) and tax basis capital account entries for both Mary and Todd at formation of the partnership. 2. Assume that Todd's contributed property is later sold for $ 2,800,000. No depreciation deductions were claimed. Show the allocation of the book and tax gain from this sale, and explain which one will be reflected on the tax return of the partnership. YOU MUST SHOW CAPITAL ACCOUNTS USING THE SAME FORMAT AS I USED ON THE VIDEO
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