Three years ago, Mario joined the MN Partnership by contributing land with a $10,000 basis and an $18,000 FMV. On January 15 of the current year, Mario has a basis in his partnership interest of $20,000, and none of his precontribution gainhas been recognized. On January 15, Mario receives a current distribution of a property other than the contributed land with a $15,000 basis and a $23,000 FMV.Read the requirements......Requirement a. Does Mario recognize any gain or loss on the distribution?Marioon the distribution.Requirementsa. Does Mario recognize any gain or loss on the distribution?b. What is Mario's basis in his partnership interest after the distribution?c. What is the partnership's basis in the land Mario contributed after Marioreceives this distribution?PrintDone

Partnership is an agreement or association between two or more than two persons, in which they…

Answered: Three years ago, Mario joined the MN…

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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Andy has an outside basis in Canine Partnership of $520,000. The partnership distributes the following assets to Andy in a proportionate, non-liquidating distribution: Land (fair market value of $6000,000 and basis to partnership of $240,000 Cash of $100,000 Accounts receivable (fair market value of $200,000 and basis of $0) How much gain of loss will Canine Partnership recognize from this distribution?
Bryan and Cody each contributed $120,000 to the newly formed BC Partnership in exchange for a 50% interest. The partnership used the available funds to acquire equipment costing $200,000 and to fund current operating expenses. The partnership agreement provides that depreciation will be allocated 80% to Bryan and 20% to Cody. All other items of income and loss will be allocated equally between the partners.Upon liquidation of the partnership, property will be distributed to the partners in accordance with their § 704(b) book capital account balances. Any partner with a negative capital account must contribute cash in the amount of the negative balance to restore the capital account to $0. In its first year, the partnership reported an ordinary loss (before depreciation) of $80,000 and depreciation expense of $36,000. In its second year, the partnership reported $40,000 of income from operations (before depreciation), and it reported depreciation expense of $57,600. a. Calculate the…
Cheryl and Joseph formed a partnership. Cheryl received a 50% interest in partnership capital and profits in exchange for contributing land with a basis of $140,000 and a fair market value of $300,000. Joseph received a 50% interest in partnership capital and profits in exchange for contributing $300,000 of cash. Three years after the contribution date, the land contributed by Cheryl is sold by the partnership to a third party for $380,000. How much taxable gain will Cheryl recognize from the sale? a) $40,000 b) $120,000 c) $160,000 d) $200,000 e) None of the above
1. A, B and C, three individuals, form a general partnership by contributing the following property in exchange for equal 1/3 interests in the partnership's capital, profits, and losses: A contributes land, a capital asset that A acquired several years ago, worth $100 in which A has a tax basis of $40. contributes machinery with a basis of $25 and a value of $60, plus $40 in cash. purchased the machinery several years ago for $75 and has taken $50 of depreciation. contributes inventory with a value of $100 in which has a basis of $90. What gain and/or loss will be recognized by the partners and the partnership on formation? What will be the partnership's "inside basis" and holding period for each of the contributed assets? What will be the partners' "outside bases" and holding period for their partnership interests?
Tyler and Sarah formed the equal TS Partnership on January 1 of the current year. A contributed $100,000 of cash and land with a fair market value of $112,500 and an adjusted basis of $93,750. Sarah contributed equipment with a fair market value of S212,500 and an adjusted basis of $25,000. Sarah had used the equipment in his sole proprietorship. Compute the following: Tyler's gain realized: 212,500 Sarah's gain realized: 212,500 Tylers's gain recognized: 118,750 Sarah's gain recognized: TS's gain recognized: Tyler's basis in his partnership interest: Sarah's basis in his partnership interest:
A and B formed the equal AB Partnership on January 1 of the current year. A contributed $100,000 ofcash and land with a fair market value of $112,500 and an adjusted basis of $93,750. B contributedequipment with a fair market value of $212,500 and an adjusted basis of $25,000. B had used theequipment in his sole proprietorship.Compute the following: B’s gain recognized__________________________ AB’s gain recognized__________________________ A’s basis in his partnership interest__________________________ B’s basis in his partnership interest__________________________
A has been a partner in the ABC Partnership for only four months. During the current year, the partnership sold investment land that it purchased six years ago and recognized a $100,000 gain. A's distributive share of this gain is long-term capital gain. T or F
Required information [The following information applies to the questions displayed below.] Aaron, Deanne, and Keon formed the Blue Bell General Partnership at the beginning of the current year. Aaron and Deanne each contributed $124,000 and Keon transferred an acre of undeveloped land to the partnership. The land had a tax basis of $56,000 and was appraised at $180,000. The land was also encumbered with a $56,000 nonrecourse mortgage for which no one was personally liable. All three partners agreed to split profits and losses equally. At the end of the first year, Blue Bell made a $7,200 principal payment on the mortgage. For the first year of operations, the partnership records disclosed the following information: $ 480,000 470,000 70,000 1,500 600 Sales revenue Cost of goods sold Operating expenses Long-term capital gains §1231 gains Charitable contributions 300 Municipal bond interest Salary paid as a guaranteed payment to Deanne (not included in expenses) 300 3,000 c. Using the…
Misha receives a proportionate nonliquidating distribution when the basis of her partnership interest is $60,000. The distribution consists of $80,000 cash and inventory (adjusted basis to the partnership of $10,000, fair market value of $20,000). How much gain or loss does Misha recognize, and what is her basis in the distributed inventory and in her partnership interest following the distribution?

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