Landry, Conner, and Shaquille are partners in Shocks, LLC, an entity taxed as a partnership. Each partner has a 1/3rd interest in the partnership. Landry contributed depreciable real estate (FMV = $300,000; Basis = $90,000). Conner and Shaquille each contributed $300,000 cash. Assume the real estate originally was depreciable on a straight-line basis over 30 years. The property has 10 years remaining on its recovery period. Assume the same facts as above, except the partnership adopts the traditional method with curative allocations, and the partnership has net operating income (before considering depreciation) of $120,000. How is the book and tax income and depreciation allocated to each partner? What are the partners’ ending capital accounts?
Landry, Conner, and Shaquille are partners in Shocks, LLC, an entity taxed as a
Assume the same facts as above, except the partnership adopts the traditional method with curative allocations, and the partnership has net operating income (before considering depreciation) of $120,000. How is the book and tax income and depreciation allocated to each partner? What are the partners’ ending capital accounts?
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