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. Assuming the partnership has no other tax items during the year and that it adopts the traditional method, how is book and tax 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 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. Assuming the partnership has no other tax items during the year and that it adopts the traditional method, how is book and tax depreciation allocated to each partner? What are the partners’ ending capital accounts?

SWFT Corp Partner Estates Trusts

42nd Edition

ISBN:9780357161548

Author:Raabe

Publisher:Raabe

Chapter11: Partnerships: Distributions, Transfer Of Interests, And Terminations

Section: Chapter Questions

Problem 31P

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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?
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…
Aaron, Deanne, and Keon formed the Blue Bell General Partnership at the beginning of the 2022. Aaron and Deanne each contributed $154,000, and Keon transferred an acre of undeveloped land to the partnership. The land had a tax basis of $76,600 and was appraised at $224,000. The land was also encumbered with a $76,600 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 $11,400 principal payment on the mortgage. For the first year of operations, the partnership records disclosed the following information: Sales revenue $ 536,000 Cost of goods sold 445,200 Operating expenses 105,200 Long-term capital gains 3,060 §1231 gains 600 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 immediately after…
tax forms . 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. At the end of the first year, Blue Bell made a $7,000 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) $470,000 410,000 70,000 2,400 900 300 300 3,000 a) Compute the adjusted basis of each partner's interest in the partnership immediately after…
Greene and Whatley formed a partnership at the beginning of the year, agreeing to share capital and profits equally. Greene contributed $50,000 cash. Whatley contributed land with an adjusted basis to him of $20,000 and a fair market value of $54,000 at the time of contribution. The land is subject to a $8,000 mortgage, which is assumed by the partnership. Whatley's tax basis in the partnership after the contribution is A. $12,000 B. $16,000 C. $50,000 D. None of these E. $20,000
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?
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?
Darlene, Eric, and Francis form an equal partnership (DEF). They contributed the following assets: Darlene contributes equipment (FMV = $9,000; basis = $9,000); goodwill (FMV = $15,000; basis = $0); accounts receivable (FMV = $3,000; basis = $0). Darlene has held the equipment for two years and generated the goodwill in her sole proprietorship business, which she has operated for 10 years. Eric contributes cash of $9,000; Whiteacre (FMV = $12,000; basis = $30,000); and Greenacre (FMV = $6,000; basis = $1,500). Eric has held the properties for 3 years prior to contribution. Francis contributes cash of $21,000 and Blackacre (FMV = $6,000; basis = $3,000). Francis held Blackacre for 6 months prior to contribution. Construct an opening tax balance sheet for the DEF partnership. Assets Book Tax Liabilities Book Tax Capital Totals…
Susan's salary is $44,000 and she received dividends of $600. She received a statement from SJ partnership indicating that her share of the partnership's income was $4,000. The partnership distributed $1,000 to her during the year and $600 after year-end. She won $2,000 in the state lottery and spent $50 on lottery tickets. Requirement Which amounts are taxable? (Complete all input fields.) Taxable in the current year? Salary, $44,000 Dividends received, $600 Share of partnership income, $4,000 Partnership distribution in the current year, $1,000 Partnership distribution in the following year, $600 State lottery winnings of $2,000