Required information Comprehensive Problem 15-81 (LO 15-1, LO 15-2, LO 15-3, LO 15-4, LO 15-5, LO 15-6) (Algo) [The following information applies to the questions displayed below.] The TimpRiders LP has operated a motorcycle dealership for a number of years. Lance is the limited partner, Francesca is the general partner, and they share capital and profits equally. Francesca works full time managing the partnership. Both the partnership and the partners report on a calendar-year basis. At the start of the current year, Lance and Francesca had bases of $12,300 and $4,700, respectively, and the partnership did not have any liabilities. During the current year, the partnership reported the following results from operations: Net sales Cost of goods sold Operating expenses Short-term capital loss Tax-exempt interest §1231 gain On the last day of the year, the partnership distributed $4,700 each to Lance and Francesca. $ 702,000 527,000 190,000 3,600 3,700 7,700
Required information Comprehensive Problem 15-81 (LO 15-1, LO 15-2, LO 15-3, LO 15-4, LO 15-5, LO 15-6) (Algo) [The following information applies to the questions displayed below.] The TimpRiders LP has operated a motorcycle dealership for a number of years. Lance is the limited partner, Francesca is the general partner, and they share capital and profits equally. Francesca works full time managing the partnership. Both the partnership and the partners report on a calendar-year basis. At the start of the current year, Lance and Francesca had bases of $12,300 and $4,700, respectively, and the partnership did not have any liabilities. During the current year, the partnership reported the following results from operations: Net sales Cost of goods sold Operating expenses Short-term capital loss Tax-exempt interest §1231 gain On the last day of the year, the partnership distributed $4,700 each to Lance and Francesca. $ 702,000 527,000 190,000 3,600 3,700 7,700
Chapter14: Choice Of Business Entity—operations And Distributions
Section: Chapter Questions
Problem 72TA
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![Required information
Comprehensive Problem 15-81 (LO 15-1, LO 15-2, LO 15-3, LO 15-4, LO 15-5, LO 15-6) (Algo)
[The following information applies to the questions displayed below.]
The TimpRiders LP has operated a motorcycle dealership for a number of years. Lance is the limited partner, Francesca is
the general partner, and they share capital and profits equally. Francesca works full time managing the partnership. Both
the partnership and the partners report on a calendar-year basis. At the start of the current year, Lance and Francesca had
bases of $12,300 and $4,700, respectively, and the partnership did not have any liabilities. During the current year, the
partnership reported the following results from operations:
Net sales
Cost of goods sold
$ 702,000
527,000
190,000
Operating expenses
Short-term capital loss
Tax-exempt interest
§1231 gain
On the last day of the year, the partnership distributed $4,700 each to Lance and Francesca.
a. Year end basis
b. Loss limited by tax basis
c. Loss limited by passive activity
3,600
3,700
7,700
Comprehensive Problem 15-81 Part 1 (Algo)
a. What outside basis do Lance and Francesca have in their partnership interests at the end of the year?
b. How much of their losses are currently not deductible by Lance and Francesca because of the tax-basis limitation?
c. To what extent does the passive activity loss limitation apply in restricting their deductible losses for the year?
(For all the requirements, negative amounts should be entered with a minus sign. Leave no answer blank. Enter zero if applicable.)
Answer is complete but not entirely correct.
Lance
7,600
Francesca
$
$
$
0 $
$ 7,600 $
0
3,600 X
0](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fa58d73d1-6a0c-436f-aec7-6597a30d22b0%2F047a9f6b-0f79-4ab6-8f59-ebf0d9413169%2Fbc5ehx5_processed.png&w=3840&q=75)
Transcribed Image Text:Required information
Comprehensive Problem 15-81 (LO 15-1, LO 15-2, LO 15-3, LO 15-4, LO 15-5, LO 15-6) (Algo)
[The following information applies to the questions displayed below.]
The TimpRiders LP has operated a motorcycle dealership for a number of years. Lance is the limited partner, Francesca is
the general partner, and they share capital and profits equally. Francesca works full time managing the partnership. Both
the partnership and the partners report on a calendar-year basis. At the start of the current year, Lance and Francesca had
bases of $12,300 and $4,700, respectively, and the partnership did not have any liabilities. During the current year, the
partnership reported the following results from operations:
Net sales
Cost of goods sold
$ 702,000
527,000
190,000
Operating expenses
Short-term capital loss
Tax-exempt interest
§1231 gain
On the last day of the year, the partnership distributed $4,700 each to Lance and Francesca.
a. Year end basis
b. Loss limited by tax basis
c. Loss limited by passive activity
3,600
3,700
7,700
Comprehensive Problem 15-81 Part 1 (Algo)
a. What outside basis do Lance and Francesca have in their partnership interests at the end of the year?
b. How much of their losses are currently not deductible by Lance and Francesca because of the tax-basis limitation?
c. To what extent does the passive activity loss limitation apply in restricting their deductible losses for the year?
(For all the requirements, negative amounts should be entered with a minus sign. Leave no answer blank. Enter zero if applicable.)
Answer is complete but not entirely correct.
Lance
7,600
Francesca
$
$
$
0 $
$ 7,600 $
0
3,600 X
0
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