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?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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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. 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?
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