The TimpRiders LP has operated a motorcycle dealership for a number of years. Amir is the limited partner, Frances- the general partner, and they share capital and profits equally. Francesca works full time managing the partnership. the partnership and the partners report on a calendar-year basis. At the start of the current year, Amir and Francesca bases of $11,900 and $4,100, respectively, and the partnership did not have any liabilities. During the current year, th partnership reported the following results from operations: Net sales Cost of goods sold Operating expenses Short-term capital loss Tax-exempt interest §1231 gain $ 684,000 511,000 186,000 2,800 3,100 7,100 On the last day of the year, the partnership distributed $4,100 each to Amir and Francesca. mprehensive Problem 09-81 Part 1 (Algo)

The TimpRiders LP has operated a motorcycle dealership for a number of years. Amir is the limited partner, Frances- the general partner, and they share capital and profits equally. Francesca works full time managing the partnership. the partnership and the partners report on a calendar-year basis. At the start of the current year, Amir and Francesca bases of $11,900 and $4,100, respectively, and the partnership did not have any liabilities. During the current year, th partnership reported the following results from operations: Net sales Cost of goods sold Operating expenses Short-term capital loss Tax-exempt interest §1231 gain $ 684,000 511,000 186,000 2,800 3,100 7,100 On the last day of the year, the partnership distributed $4,100 each to Amir and Francesca. mprehensive Problem 09-81 Part 1 (Algo)

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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Question

The TimpRiders LP has operated a motorcycle dealership for a number of years. Amir 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, Amir and Francesca had
bases of $11,900 and $4,100, 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 $4,100 each to Amir and Francesca.
$ 684,000
511,000
186,000
Comprehensive Problem 09-81 Part 1 (Algo)
a. Year-end basis
b. Loss limited by tax basis
c. Loss limited by passive activity
2,800
3,100
7,100
Required:
a. What outside basis do Amir and Francesca have in their partnership interests at the end of the year?
b. How much of their losses are currently not deductible by Amir 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?
Note: For all the requirements, negative amounts should be entered with a minus sign. Leave no answers blank. Enter zero if
applicable.
$
Amir
OF
Francesca
$
$
0

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