Jada Corp owns a 20 percent interest in JV, LLC. Jada’s taxable year ends September 30th. The remaining 80 percent of JV is owned by 20 different partners, each of whom owns a 4 percent interest. Of those 20 partners, 10 have a taxable year that ends December 31. The other 10 have a taxable year that ends July 31st. What is JV, LLC’s required taxable year?

Jada Corp owns a 20 percent interest in JV, LLC. Jada’s taxable year ends September 30th. The remaining 80 percent of JV is owned by 20 different partners, each of whom owns a 4 percent interest. Of those 20 partners, 10 have a taxable year that ends December 31. The other 10 have a taxable year that ends July 31st. What is JV, LLC’s required taxable year?

Income Tax Fundamentals 2020

38th Edition

ISBN:9780357391129

Author:WHITTENBURG

Publisher:WHITTENBURG

Chapter10: Partnership Taxation

Section: Chapter Questions

Problem 14MCQ

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Burgundy, Inc., and Violet are equal partners in the calendar year BV LLC. Burgundy uses a fiscal year ending April 30, and Violet uses a calendar year. Burgundy receives an annual guaranteed payment of $100,000 for use of capital contributed by Burgundy. BV’s taxable income (after deducting the payment to Burgundy, Inc.) is $80,000 for 2020 and $90,000 for 2021. a. What is the amount of income from the LLC that Burgundy must report for its tax year ending April 30, 2021? b. What is the amount of income from the LLC that Violet must report for her tax year ending December 31, 2021?
Burgundy, Inc., and Violet are equal partners in the calendar year BV LLC. Burgundy uses a fiscal year ending April 30, and Violet uses a calendar year. Burgundy receives an annual guaranteed payment of $100,000 for use of capital contributed by Burgundy. BV’s taxable income (after deducting the payment to Burgundy, Inc.) is $80,000 for 2020 and $90,000 for 2021. a. Now assume that Burgundy, Inc.’s annual guaranteed payment is increased to $120,000 starting on January 1, 2021, and the LLC’s taxable income for 2020 and 2021 (after deducting Burgundy’s guaranteed payment) is the same (i.e., $80,000 and $90,000, respectively). What is the amount of income from the LLC that Burgundy, Inc., must report for its tax year ending April 30, 2021?
Check my work Burgundy, Inc., and Violet Gomez are equal partners in the calendar year BV LLC. Burgundy uses a fiscal year ending April 30, and Violet uses a calendar year. Burgundy receives an annual guaranteed payment of $100,000 for use of capital contributed by Burgundy. BV’s taxable income (after deducting the payment to Burgundy) is $80,000 for 2020 and $90,000 for 2021. How much income from BV must Burgundy report for its tax year ending April 30, 2021? Burgundy receives a guaranteed payment of $100,000 plus 50% of $80,000 = $40,000 Burgundy’s total income is $140,000 How much income from BV must Violet report for her tax year ending December 31, 2021? Violet receives 50% of $90,000, BV’s taxable income after guaranteed payment to Burgundy, 50% of $90,000= $45,000
At the beginning of 2022, Ms. Pope purchased a 20 percent interest in PPY Partnership for $22,000. Ms. Pope’s Schedule K-1 reported that her share of PPY’s debt at year-end was $21,000, and her share of ordinary loss was $38,600. On January 1, 2023, Ms. Pope sold her interest to another partner for $2,900 cash. Required: How much of her share of PPY’s loss can Ms. Pope deduct on her 2022 return? Compute Ms. Pope’s recognized gain on sale of her PPY interest. How would your answers to parts a and b change if PPY were an S corporation instead of a partnership?
Kerry is a partner in the Kerry, Davis, Smith & Jones Partnership. Kerry owned 25% from January 1, 2021, to June 30, 2021, when she bought Jones’s 25% interest. She owned 50% for the rest of the year. The partnership had ordinary income of $175,200 and $20,000 in long-term capital gains. Required: Barring any special allocations in a partnership agreement, what is Kerry’s share of income? Note: Do not round any division. Round other computations to the nearest whole dollar value.
Zelda owns a 60 percent general interest in YZ Partnership. At the beginning of 2020, the adjusted basis in her YZ interest was $95,000. For 2020, Y generated a $210,000 business loss, earned $14,600 dividend and interest income on its investments, and recognized a $6,200 capital gain. YZ made no distributions to its partners and had no debt. In 2021, Y generated $7,000 ordinary business income and $18,000 dividend and interest income. The partnership made no distributions. At the end of the year, YZ had $21,000 debt. Required: a. How much partnership income will Zelda report on her 2021 return? Assume the excess business loss limitation does not apply. b. Compute Zelda's adjusted basis in her YZ interest at the end of 2021.
Check my answer. Ellie and Linda are equal owners in Otter Enterprises, a calendar year business. During the current year, Otter Enterprises has $320,000 of gross income and $210,000 of operating expenses. In addition, Otter has a long-term capital gain of $15,000 and makes distributions to Ellie and Linda of $25,000 each. Discuss the impact of this information on the taxable income of Otter, Ellie, and Linda if Otter is: A partnership. Income generated for a partnership is taxable at the shareholder level Otter - less expenses = ordinary income (320,000-210,000=110,000) Add capital gain 110,000+15,000=125,000 taxable income Divide by each partners’ share (Ellie and Linda) = 125,000/2=62,500 taxable income for each partner. An S corporation. S Corps generally do not pay Federal Income tax. Income generated for an S Corp is passed through to the shareholder and each shareholder pays taxes on their share. Since there are two shareholders, Ellie, and Linda. Otter - less…
In Year 1 you invested $500,000 in exchange for a 40% partnership interest in ABC, LP. You later received a K-1 from ABC reporting $50,000 as your share of ABC’s Year 1 taxable income. During Year 1 you received a cash distribution from ABC of $75,000. You received a K-1 from ABC reporting $85,000 as your share of ABC’s Year 2 NOL. During Year 2 you received a cash distribution from ABC of $90,000. You received a K-1 from ABC reporting $110,000 as your share of ABC’s Year 3 taxable income. During Year 3 you received a cash distribution from ABC of $125,000. After all of the above, what is your adjusted tax basis in your partnership interest in ABC? $________
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14. On Jan. 1, 2019, Anatalio, Yecyec, Guzon, and Calimpusan formed Butuan Trading Co., a partnership, with contributions as follows: Anatalio, P50,000; Yecyec, P25,000; Guzon, P25,000 and Calimpusan, P20,000. The partnership contract provided that each partner shall receive a 5% interest on contributed capital, and that Anatalio and Yecyec shall receive salaries of P5,000 and P3,000, respectively. The contract also provided that Guzon shall receive a minimum of P2,500 per annum, and Calimpusan a minimum of P6,000 per annum, which is inclusive of amounts representing interest and share of remaining profits. The balance of the profits shall be distributed to Anatalio, Yecyec, Guzon, and Calimpusan in a ratio 3:3:2:2. What amount must be earned by the partnership, before any charge for interest and salaries, so that Anatalio may receive an aggregate of P12,500 including interest, salary and share of profits? а. Р32,333 b. Р30,000 P30,667 d. P16,667 C.
Enercio contributes $100,000 in exchange for a 40% interest in the calendar year ABC LLC, which is taxed as a partnership. This year, the LLC generates $80,000 of ordinary taxable income and has no separately stated income or expenses. Enercio with- drew $10,000 from the partnership during the year. Enercio is taxed on what amount of ABC’s income? On how much of the $10,000 distribution will Enercio be taxed?