Note: use the following fact pattern for the next two questions. Imelda provided accounting and tax services to Acacia, a partnership. As compensation for her services Imelda received a 10 percent interest in the partnership. Acacia currently has $20,000 of nonrecourse debt and no recourse debt. The current fair value of Acacia's capital is $60,000. If Imelda receives only a 10 percent profits interest, how much income must she report and what is her basis in the partnership interest? $6,000 income: $0 basis O $2,000 income: $8,000 basis $0 income: $2,000 basis $0 income; $6,000 basis

Note: use the following fact pattern for the next two questions. Imelda provided accounting and tax services to Acacia, a partnership. As compensation for her services Imelda received a 10 percent interest in the partnership. Acacia currently has $20,000 of nonrecourse debt and no recourse debt. The current fair value of Acacia's capital is $60,000. If Imelda receives only a 10 percent profits interest, how much income must she report and what is her basis in the partnership interest? $6,000 income: $0 basis O $2,000 income: $8,000 basis $0 income: $2,000 basis $0 income; $6,000 basis

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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