Jones and Smith formed a partnership with each partner contributingthe following items:JonesSmithCash...P 80,000P 40,000Building - Cost to Jones..300,000Fair value....400,000Inventory - Cost Smith..200,000Fair value....280,000Mortgage Payable. .120,000Account Payable. .60,000Assume that for tax purposes Jones and Smith agree to share smuallyin the liabilities assumed by the Jones and Smith partnership. What isthe balance in Smith's capital account for financial accounting

The assets contributed to the partnership firm by partners would be taken on fair value of the…

Answered: Jones and Smith formed a partnership…

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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6a.Harry and Sally formed the Evergreen partnership by contributing the following assets in exchange for a 50 percent capital and profits interest in the partnership: Basis Fair Market Value Harry: Cash $ 30,000 $ 30,000 Land 100,000 120,000 Totals $ 130,000 $ 150,000 Sally: Equipment used in a business 200,000 150,000 Totals $ 200,000 $ 150,000 What is Evergreen’s tax basis in its assets?
pvn.2
Taylor and Tanner formed a partnership. Taylor contributed $50,000 in cash. Tanner contributed land and buildings he purchased for $50,000 some time ago. His tax basis in the property is now $30,000, although it was recently appraised for $70,000. There is a $15,000 mortgage attached to the building that the partnership will assume. What is the amount of Tanner’s capital account after his contribution? a. $50,000 b. $30,000 c. $35,000 d. $55,000
12a.Harry and Sally formed the Evergreen partnership by contributing the following assets in exchange for a 50 percent capital and profits interest in the partnership: Basis Fair Market Value Harry: Cash $ 30,000 $ 30,000 Land 100,000 120,000 Totals $ 130,000 $ 150,000 Sally: Equipment used in a business 200,000 150,000 Totals $ 200,000 $ 150,000 What is Sally’s tax basis in her partnership interest?
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1. A, B and C, three individuals, form a general partnership by contributing the following property in exchange for equal 1/3 interests in the partnership's capital, profits, and losses: A contributes land, a capital asset that A acquired several years ago, worth $100 in which A has a tax basis of $40. contributes machinery with a basis of $25 and a value of $60, plus $40 in cash. purchased the machinery several years ago for $75 and has taken $50 of depreciation. contributes inventory with a value of $100 in which has a basis of $90. What gain and/or loss will be recognized by the partners and the partnership on formation? What will be the partnership's "inside basis" and holding period for each of the contributed assets? What will be the partners' "outside bases" and holding period for their partnership interests?
Tyler and Sarah formed the equal TS Partnership on January 1 of the current year. A contributed $100,000 of cash and land with a fair market value of $112,500 and an adjusted basis of $93,750. Sarah contributed equipment with a fair market value of S212,500 and an adjusted basis of $25,000. Sarah had used the equipment in his sole proprietorship. Compute the following: Tyler's gain realized: 212,500 Sarah's gain realized: 212,500 Tylers's gain recognized: 118,750 Sarah's gain recognized: TS's gain recognized: Tyler's basis in his partnership interest: Sarah's basis in his partnership interest:
Vikarmbhai
Zoey contributed land with a tax basis of $45,000 and a fair market value of $100,000 in exchange for a 20% percent interest in the new formed ZAT Partnership. All other partners contributed cash and ZAT partnership has no liabilities. How much income must Zoey recognize as a result of the transaction? Question 4 options: a) $0. b) $20,000. c) $45,000. d) $55,000. e) $100,000.
Individuals A and B carry on business through a partnership. A and B are both active in the business and share profits equally after deducting partner salaries. In the current year the partnership paid salaries of $80,000 to A and $50,000 to В. The partnership reported net income of $ 160,000 after partner salaries. The net income includes a gain of $28, 000 on the sale of non - depreciable Gapital property, $14, 000 of eligible dividends, and a deduction of $2, 000 for charitable donations. Determine A's share of the partnership net income for tax purposes. $

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