Mickey, Don, and Derek are equal (1/3rd) partners in River Avenue, LLC. Mickey’s outside basis in his partnership interest is $250. River Avenue’s balance sheet (include FMV) is below. What are the tax consequences to Mickey if he sells his interest to Roger for $500 cash + debt assumption? How much of the gain/loss is ordinary and how much is capital? *Assume that River Avenue originally purchased the machinery for $120 (i.e., accumulated depreciation = $65), and that $120 of depreciation has been taken on the building since its acquisition five years ago* Assets FMV Book Tax Debt Book Tax Cash 240 240 240 Recourse 150 150 A/R 60 75 75 Inventory 150 90 90 Capital Machinery 100 55 55 Mickey 200 200 Building 500 200 200 Don 200 200 Stock 300 90 90 Derek 200 200 Goodwill 300 0 0

Mickey, Don, and Derek are equal (1/3rd) partners in River Avenue, LLC. Mickey’s outside basis in his partnership interest is $250. River Avenue’s balance sheet (include FMV) is below. What are the tax consequences to Mickey if he sells his interest to Roger for $500 cash + debt assumption? How much of the gain/loss is ordinary and how much is capital? Assume that River Avenue originally purchased the machinery for $120 (i.e., accumulated depreciation = $65), and that $120 of depreciation has been taken on the building since its acquisition five years ago Assets FMV Book Tax Debt Book Tax Cash 240 240 240 Recourse 150 150 A/R 60 75 75 Inventory 150 90 90 Capital Machinery 100 55 55 Mickey 200 200 Building 500 200 200 Don 200 200 Stock 300 90 90 Derek 200 200 Goodwill 300 0 0

Income Tax Fundamentals 2020

38th Edition

ISBN:9780357391129

Author:WHITTENBURG

Publisher:WHITTENBURG

Chapter10: Partnership Taxation

Section: Chapter Questions

Problem 12MCQ

See similar textbooks

Similar questions

When Nasa Properties LLC was formed, Nova contributed land (valye of $200,000 and basis of $50,000) and $100,000 cash, and Oscar contributed cash of $300,000. Both partners received a 50% interest in partnership profits and capital. -a. How is the land recorded for §704(b) book capital account purpose? -b. What is Nasa’s tax basis in the land? -c. If Nasa sells the land several year later for $300,000, how much tax gain will Nova and Oscar report?
William, Xavier and Zelda formed WXZ Partnership. William contributed land with a fair market value of $50,000 (basis of $10,000) in exchange for a 50% interest (capital and profits/losses). Zelda contributed services worth $30,000 in exchange for a 40% profit interest (profit interest only; no capital interest). Xavier owns the remaining interest in the partnership. What is the amount of William's recognized gain on the contribution of land in exchange for his interest in the partnership?
Cosmo contributed land with a fair market value of $470,000 and a tax basis of $115,300 to the Y Mountain partnership in exchange for a 35 percent profits and capital interest in the partnership. The land is secured by $145,000 of nonrecourse debt. Other than this nonrecourse debt, Y Mountain partnership does not have any debt. (Leave no answer blank. Enter zero if applicable.) a. How much gain will Cosmo recognize from the contribution? Gain recognized
Tamara owns interest in two different entities: a partnership and an S-Corp. Her basis in the partnership is $40,000. Her basis in the S-Corp is 23,250. Tamara is the sole owner of the S-Corp. a. Assume the partnership gives a current distribution to Tamara of $30,000 cash and land worth $20,000 (basis of $15,000). Determine the following: 1. Basis of Tamara's Partnership Interest_ 2. Basis of Land to Tamara b. Independent of part (a), assume the partnership gives a liquidating distribution to Tamara of $30,000 cash and two pieces of equipment. Equipment 1 is worth 3,000 (basis: 3,000) and equipment two is worth 2,000 (basis: 0). Compute the following: 1. Basis of Tamara's Partnership Interest 2. Basis of equipment 1 to Tama 3. Basis of equipment 2 to Tamara c. Tamara received a cash distribution of $25,500 from her S-Corp. Corporate-level accounts at the end of the year were as follows. $9,000 13,500 AAA OAA Accumulated E & P 900 Fill out the following table to determine how Tamara's…
Cosmo contributed land with a fair market value of $365,000 and a tax basis of $99,000 to the Y Mountain partnership in exchange for a 30 percent profits and capital interest in the partnership. The land is secured by $161,000 of nonrecourse debt. Other than this nonrecourse debt, Y Mountain partnership does not have any debt. a. How much gain will Cosmo recognize from the contribution? (Leave no answer blank. Enter zero if applicable.) b. What is Cosmo’s tax basis in his partnership interest?
Check my work Wozniacki and Wilcox form Jewel LLC, with each investor receiving a one-half interest in the capital and profits of the LLC. Wozniacki receives his one-half interest as compensation for tax planning services that he rendered prior to the formation of the LLC. Wilcox contributes $50,000 cash. The value of a one-half capital interest in the LLC (for each of the parties) is $50,000. Compute Wozniacki’s realized and recognized gain from joining Jewel. Generally, formation of LLC is treated the same as a partnership and no gain or loss is recognized at formation. One of the exceptions to this provision is when capital interest is received as compensation for services rendered. When this happens, it is not a tax-deferred transaction because services are not treated as “property” Since Wozniacki receives his half interest in the partnership for services rendered with a FMV of $50,000, he has a realized and recognized gain of $50,000 of ordinary income…
[The following information applies to the questions displayed below.]Cliff’s basis in his Aero Partnership interest is $16,900. Cliff receives a distribution of $29,400 cash from Aero in complete liquidation of his interest. Aero is an equal partnership with the following balance sheet: Tax Basis FMV Assets Cash $ 29,400 $ 29,400 Investment 16,900 16,900 Land 4,400 40,800 Totals $ 50,700 $ 87,100 Liabilities and capital Capital—Chris $ 16,900 Capital—Cliff $ 16,900 Capital—Cooper $ 16,900 Totals $ 50,700 Problem 21-57 Part b (Algo) b. If Aero has a §754 election in place, what is the amount of the special basis adjustment? please prvide correct solution
i need the answer quickly
Dd.124.
María and Bob form Robin Corporation. María transfers property worth $100,000 with a basis of $35,000 for 70 shares in Robin Corporation. Bob receives 30 shares for property worth $40,000 with a basis of $8,000 and legal services worth $4,000 in organizing the corporation. If there is no gain or loss, enter "0" for the amount. a. What gain or income, if any, will the parties recognize on the transfer? María recognizes María has a basis of $ b. What basis do María and Bob have in the Robin Corporation stock? of $ 1 Robin Corporation has a basis of $ Bob recognizes and Bob has a basis of $ c. What is Robin Corporation's basis in the property and services it received from María and Bob? in the property Bob transferred. in the stock. in the property María transferred and a basis of
María and Bob form Robin Corporation. María transfers property worth $420,000 with a basis of $150,000 for 70 shares in Robin Corporation. Bob receives 30 shares for property worth $165,000 with a basis of $30,000 and legal services worth $15,000 in organizing the corporation. If there is no gain or loss, enter "0" for the amount. a. What gain or income, if any, will the parties recognize on the transfer? María recognizes no gain or loss Feedback of $ Bob recognizes ordinary income of $ Check My Work Section 351 is mandatory if a transaction satisfies the provision's requirements. The three requirements for nonrecognition of gain or loss under § 351 are that (1) property is transferred (2) in exchange for stock and (3) the property transferors are in control of the corporation after the exchange. b. What basis do María and Bob have in the Robin Corporation stock? María has a basis of $ Feedback Check My Work Incorrect , and Bob has a basis of $ 420,000 X in the stock. c. What is Robin…
ssignment/takeAssignmentMain.do?invoker=&takeAssignmentSessionLocator%=&inprogress=false U William, a CPA, owns a 75% interest in Burglar Concrete Company (BCC). BCC is organized as a partnership. During the current year, William prepares BCC's tax return and receives his normal $300 fee for the preparation of the return. I. BCC cannot deduct the $300 fee because of the related party rules. I. William must recognize the $300 fee as income. Oa. Only statement I is correct. Ob. Only statement II is correct. Oc. Both statements are correct. Od. None of these statements are correct.

SEE MORE QUESTIONS

Recommended textbooks for you

Income Tax Fundamentals 2020

Accounting

ISBN:

9780357391129

Author:

WHITTENBURG

Publisher:

Cengage

CONCEPTS IN FED.TAX., 2020-W/ACCESS

Accounting

ISBN:

9780357110362

Author:

Murphy

Publisher:

CENGAGE L

SWFT Corp Partner Estates Trusts

Accounting

ISBN:

9780357161548

Author:

Raabe

Publisher:

Cengage

SWFT Essntl Tax Individ/Bus Entities 2020

Accounting

ISBN:

9780357391266

Author:

Nellen

Publisher:

Cengage

Individual Income Taxes

Accounting

ISBN:

9780357109731

Author:

Hoffman

Publisher:

CENGAGE LEARNING - CONSIGNMENT

SWFT Individual Income Taxes

Accounting

ISBN:

9780357391365

Author:

YOUNG

Publisher:

Cengage

Income Tax Fundamentals 2020

Accounting

ISBN:

9780357391129

Author:

WHITTENBURG

Publisher:

Cengage

CONCEPTS IN FED.TAX., 2020-W/ACCESS

Accounting

ISBN:

9780357110362

Author:

Murphy

Publisher:

CENGAGE L

SWFT Corp Partner Estates Trusts

Accounting

ISBN:

9780357161548

Author:

Raabe

Publisher:

Cengage

SWFT Essntl Tax Individ/Bus Entities 2020

Accounting

ISBN:

9780357391266

Author:

Nellen

Publisher:

Cengage

Individual Income Taxes

Accounting

ISBN:

9780357109731

Author:

Hoffman

Publisher:

CENGAGE LEARNING - CONSIGNMENT

SWFT Individual Income Taxes

Accounting

ISBN:

9780357391365

Author:

YOUNG

Publisher:

Cengage

SEE MORE TEXTBOOKS

GET THE APP

About FAQ Academic Integrity Sitemap Document Sitemap

Contact Bartleby Contact Research (Essays)High School Textbooks Literature Guides Concept Explainers by Subject Essay Help Mobile App

GET THE APP

Privacy

Your CA Privacy Rights

Your NV Privacy Rights

Cookie Policy

About Ads

Manage My Data

bartleby, a Learneo, Inc. business

Assets	FMV	Book	Tax	Debt	Book	Tax
Cash	240	240	240	Recourse	150	150
A/R	60	75	75
Inventory	150	90	90	Capital
Machinery	100	55	55	Mickey	200	200
Building	500	200	200	Don	200	200
Stock	300	90	90	Derek	200	200
Goodwill	300	0	0