Kanye contributed a piece of land (FMV = $300,000; AB = $200,000) in exchange for a 50% capitaland profit (and loss) interest in KW Partnership. KW reported the following income and expensesfor last tax year:• Sales revenue: $700,000• 1231 gain: $60,000• Long-term capital loss: $10,000• Qualified dividends: $10,000• W-2 wages paid to employees: $200,000• Utilities: $140,000• Rent: $180,000No distributions were made last year.This year, KW took out a loan. Kanye's allocable share of the partnership liability is $20,000. Thepartnership intends to pay the entire loan balance off in 3 years with one lump sum payment.Which of the following are accurate? Select all that apply.Kanye's outside basis is increased by $20,000 as a result of the loanKanye's capital account balance is increased by $20,000 as a result of the loanWhen the partnership pays off the loan, Kanye's outside basis will decrease by $20,000When the partnership pays off the loan, Kanye's capital account balance will decrease by $20,000Partnership liabilities do not affect a partner's outside basis or capital account balance

Outside basis represents the adjusted basis of the partnership interest of the partners in the…

Kanye contributed a piece of land (FMV = $300,000; AB = $200,000) in exchange for a 50% capital and profit (and loss) interest in KW Partnership. KW reported the following income and expenses for last tax year: t700 000

Kanye contributed a piece of land (FMV = $300,000; AB = $200,000) in exchange for a 50% capital and profit (and loss) interest in KW Partnership. KW reported the following income and expenses for last tax year: t700 000

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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Required information [The following information applies to the questions displayed below.] Aaron, Deanne, and Keon formed the Blue Bell General Partnership at the beginning of the current year. Aaron and Deanne each contributed $124,000 and Keon transferred an acre of undeveloped land to the partnership. The land had a tax basis of $56,000 and was appraised at $180,000. The land was also encumbered with a $56,000 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 $7,200 principal payment on the mortgage. For the first year of operations, the partnership records disclosed the following information: $ 480,000 470,000 70,000 1,500 600 Sales revenue Cost of goods sold Operating expenses Long-term capital gains §1231 gains Charitable contributions 300 Municipal bond interest Salary paid as a guaranteed payment to Deanne (not included in expenses) 300 3,000 c. Using the…
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On January 1, 2021 David contributed $25,000 cash and building with a basis of $100,000 and a FMV of $165,000 in exchange for 50% interest in partnership XYZ LLC. XYZ had the following activty for 2021: Ordinary Income: $140,000 Operating expenses: $60,000 Interest Income: $10,000 Nondeductible Expenses: 5,000 What is David's outside basis in XYZ LLC on December 31, 2021? 232,500 170,000 167,500 210,000