Mary and Scott formed a partnership that maintains its records on a calendar-year basis. The balance sheet of the MS Partnership at year-end is as follows: Cash Land Inventory Mary Scott Basis $24 108 60 $ 192 $96 96 $192 Basis Fair Market Value $24 180 36 $ 240 $ 120 120 $ 240 At the end of the current year, Kari will receive a one-third capital interest only in exchange for services rendered. Kari's interest will not be subject to a substantial risk of forfeiture, and the costs for the type of services she provided are typically not capitalized by the partnership. For the current year, the income and expenses from operations are equal. Consequently, the only tax consequences for the year are those relating to the admission of Kari to the partnership. Note: Leave no answer blank. Enter zero if applicable. Do not round intermediate calculations. b. Compute Kari's basis in her partnership interest. در
Mary and Scott formed a partnership that maintains its records on a calendar-year basis. The balance sheet of the MS Partnership at year-end is as follows: Cash Land Inventory Mary Scott Basis $24 108 60 $ 192 $96 96 $192 Basis Fair Market Value $24 180 36 $ 240 $ 120 120 $ 240 At the end of the current year, Kari will receive a one-third capital interest only in exchange for services rendered. Kari's interest will not be subject to a substantial risk of forfeiture, and the costs for the type of services she provided are typically not capitalized by the partnership. For the current year, the income and expenses from operations are equal. Consequently, the only tax consequences for the year are those relating to the admission of Kari to the partnership. Note: Leave no answer blank. Enter zero if applicable. Do not round intermediate calculations. b. Compute Kari's basis in her partnership interest. در
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Mary and Scott formed a partnership that maintains its records on a calendar-year basis. The balance
sheet of the MS Partnership at year-end is as follows:
Cash
Land
Inventory
Mary
Scott
Basis
$24
108
60
$ 192
$ 96
96
$ 192
Basis
Fair Market
Value
$24
180
36
$240
$ 120
120
$ 240
At the end of the current year, Kari will receive a one-third capital interest only in exchange for
services rendered. Kari's interest will not be subject to a substantial risk of forfeiture, and the costs
for the type of services she provided are typically not capitalized by the partnership. For the current
year, the income and expenses from operations are equal. Consequently, the only tax consequences
for the year are those relating to the admission of Kari to the partnership.
Note: Leave no answer blank. Enter zero if applicable. Do not round intermediate calculations.
b. Compute Kari's basis in her partnership interest.
4
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