Suzy contributed assets valued at $360,000 (basis of $200,000) in exchange for her 40% interest in Suz-Anna GP (a general partnership in which both partners are active owners). Anna contributed land and a building valued at $640,000 (basis of $380,000) in exchange for the remaining 60% interest. Anna’s property was encumbered by qualified nonrecourse financing of $100,000, which was assumed by the partnership. The partnership reports the following income and expenses for the current tax year. What is the beginning and ending nonrecourse values. Beg $0 ending $40,000 What is the beginning Capital amount ? Sales $560,000 Utilities, salaries, depreciation, other operating expenses 360,000 Short-term capital gain 10,000 Tax-exempt interest income 4,000 Charitable contributions (cash) 8,000 Distribution to Suzy 10,000 Distribution to Anna 20,000 At the end of the year, Suz-Anna held recourse debt of $100,000 for partnership accounts payable and qualified nonrecourse financing of $200,000.
Suzy contributed assets valued at $360,000 (basis of $200,000) in exchange for her 40% interest in Suz-Anna GP (a general partnership in which both partners are active owners). Anna contributed land and a building valued at $640,000 (basis of $380,000) in exchange for the remaining 60% interest. Anna’s property was encumbered by qualified nonrecourse financing of $100,000, which was assumed by the partnership.
The partnership reports the following income and expenses for the current tax year.
What is the beginning and ending nonrecourse values. Beg $0 ending $40,000
What is the beginning Capital amount ?
|
Sales |
$560,000 |
|
Utilities, salaries, |
360,000 |
|
Short-term |
10,000 |
|
Tax-exempt interest income |
4,000 |
|
Charitable contributions (cash) |
8,000 |
|
Distribution to Suzy |
10,000 |
|
Distribution to Anna |
20,000 |
At the end of the year, Suz-Anna held recourse debt of $100,000 for partnership accounts payable and qualified nonrecourse financing of $200,000.
(A)-
Suzy’s beginning basis in her partnership interest is $240,000, calculated as follows:
Basis in contributed business-related assets $200,000
Share of partnership nonrecourse debt 40,000
Total beginning basis $240,000
Anna’s beginning basis in her partnership interest is $340,000, calculated as follows:
Basis in contributed business-related assets $380,000
Relief of debt assumed by the partnership (100,000)
Share of partnership nonrecourse debt 60,000
Total beginning basis $340,000
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