Jim and Tyler are equal partners in a general partnership. Jim contributed cash of $200,000. Tyler contributed equipment (FMV = $200,000; basis = $50,000; 5-yr property (straight-line) with two years of depreciable life remaining). Assume the partnership adopts the remedial method with respect to the contribution of the equipment and over the next five years gross receipts from business operations exactly equals deductible expenses (without considering depreciation). Determine the proper allocations of depreciation (book and tax) to each partner for each of the next five years. What are the partners’ ending capital accounts?

Jim and Tyler are equal partners in a general partnership. Jim contributed cash of $200,000. Tyler contributed equipment (FMV = $200,000; basis = $50,000; 5-yr property (straight-line) with two years of depreciable life remaining). Assume the partnership adopts the remedial method with respect to the contribution of the equipment and over the next five years gross receipts from business operations exactly equals deductible expenses (without considering depreciation). Determine the proper allocations of depreciation (book and tax) to each partner for each of the next five years. What are the partners’ ending capital accounts?

SWFT Corp Partner Estates Trusts

42nd Edition

ISBN:9780357161548

Author:Raabe

Publisher:Raabe

Chapter10: Partnerships: Formation, Operation, And Basis

Section: Chapter Questions

Problem 25CE

See similar textbooks

Similar questions

Greg and Kyle are partners in a general partnership. Greg contributes equipment (FMV = $500; basis = $200). The equipment is 5-yr property (straight-line) and has two years of depreciable life remaining. Kyle contributed $500 cash. Assume the partnership has adopted the remedial allocation method and that over the next five years gross income exactly equals deductible expenses (without considering depreciation). Determine the proper allocation of income and deduction to each partner for the first 5 years. What are the partners’ ending capital accounts?
Aaron, Deanne, and Keon formed the Blue Bell General Partnership at the beginning of the current year. Aaron and Deanne each contributed $108,000 and Keon transferred an acre of undeveloped land to the partnership. The land had a tax basis of $72,000 and was appraised at $180,000. The land was also encumbered with a $72,000 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 $6,300 principal payment on the mortgage. For the first year of operations, the partnership records disclosed the following information: Sales revenue $ 470,000 Cost of goods sold 450,000 Operating expenses 55,000 Long-term capital gains 2,100 §1231 gains 900 Charitable contributions 300 Municipal bond interest 300 Salary paid as a guaranteed payment to Deanne (not included in expenses) 3,000 a. Compute the adjusted basis of each partner’s interest in the partnership…
Aaron, Deanne, and Keon formed the Blue Bell General Partnership at the beginning of the current year. Aaron and Deanne each contributed $108,000 and Keon transferred an acre of undeveloped land to the partnership. The land had a tax basis of $72,000 and was appraised at $180,000. The land was also encumbered with a $72,000 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 $6,300 principal payment on the mortgage. For the first year of operations, the partnership records disclosed the following information: Sales revenue $ 470,000 Cost of goods sold 450,000 Operating expenses 55,000 Long-term capital gains 2,100 §1231 gains 900 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…
. Aaron, Deanne, and Keon formed the Blue Bell General Partnership at the beginning of the current year. Aaron and Deanne each contributed $110,000 and Keon transferred an acre of undeveloped land to the partnership. The land had a tax basis of $70,000 and was appraised at $180,000. The land was also encumbered with a $70,000 nonrecourse mortgage for which no one was personally liable. All three partners agreed to split profits and losses equally. Blue Bell made a $7,000 principal payment on the mortgage at the end of the first year. For the first year of operations, the partnership records disclosed the following information: Sales revenue $ 470,000 Cost of goods sold $ 410,000 Operating expenses $ 70,000 Long-term capital gains $ 2,400 §1231 gains $ 900 Charitable contributions $ 300 Municipal bond interest $ 300 Salary paid as a guaranteed payment to Deanne (not included in expenses) $ 3,000 What is the Qualified nonrecourse debt for Deanne and why.
Aaron, Deanne, and Keon formed the Blue Bell General Partnership at the beginning of the current year. Aaron and Deanne each contributed $150,000, and Keon transferred an acre of undeveloped land to the partnership. The land had a tax basis of $76,000 and was appraised at $220,000. The land was also encumbered with a $76,000 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 $11,000 principal payment on the mortgage. For the first year of operations, the partnership records disclosed the following information: Sales revenue Cost of goods sold Operating expenses Long-term capital gains §1231 gains Charitable contributions Municipal bond interest Salary paid as a guaranteed payment to Deanne (not included in expenses) $ 530,000 442,000 102,000 3,000 600 300 300 3,000 equired: Compute the adjusted basis of each partner's interest in the partnership immediately after the…