Wylie is a general partner in a service-providing partnership and receives cash of $290,300 in liquidation of his partnership interest, in which he has a basis of $217,725. The partnership owns no hot assets and continues in existence. After following all of the classification requirements of § 736, $195,953 of this amount is classified as a property payment [§ 736(b)] and $94,347 is classified as a guaranteed payment [§ 736(a)] (assume that this payment is for unstated partnership goodwill). As a result of the liquidation proceeds, how much will Wylie recognize as a capital gain or loss, and how much will be ordinary income? How much can the partnership likely deduct? Wylie recognizes a $ likely deduct $ ✔and he recognizes capital loss which is a guaranteed payment as ordinary income. The partnership can

Wylie is a general partner in a service-providing partnership and receives cash of $290,300 in liquidation of his partnership interest, in which he has a basis of $217,725. The partnership owns no hot assets and continues in existence. After following all of the classification requirements of § 736, $195,953 of this amount is classified as a property payment [§ 736(b)] and $94,347 is classified as a guaranteed payment [§ 736(a)] (assume that this payment is for unstated partnership goodwill). As a result of the liquidation proceeds, how much will Wylie recognize as a capital gain or loss, and how much will be ordinary income? How much can the partnership likely deduct? Wylie recognizes a $ likely deduct $ ✔and he recognizes capital loss which is a guaranteed payment as ordinary income. The partnership can

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

As part of the initial investment, Jackson contributes accounts receivable that had a balance of $40,480 in the accounts of a sole proprietorship. Of this amount, $1,308 is deemed completely worthless. For the remaining accounts, the partnership will establish a provision for possible future uncollectible accounts of $655. The amount debited to Accounts Receivable for the new partnership is
A 270.
55
1. A partnership has four equal partners who share profits and losses in accordance with their respective interests. It has $400,000 in taxable income but doesn't distribute any cash to the partners. a. What amount of income will the partnership report on its tax return? None. There is no business income tax on a partnership. b. What amount of the partnership's taxable income will be subject to tax at the partnership level? c. Will each partner recognize taxable income from their interest in the partnership? If so, how much? d. If ABC was a corporation with four equal owners, how would this change your answers in parts (a)- (c)?
On January 1, 2021, Bob purchased a 50 percent interest in ABC Partnership (ABC) from Tim by paying Tim $150,000 in cash. During 2021, ABC had ordinary income totaling $180,000 and paid a penalty to the state of Virginia in the amount of $1,000. ABC, which does not have any liabilities, made a distribution to its partners on December 31, 2021 in the total amount of $50,000. The ABC partnership agreement requires all income, gains, and losses to be allocated between Bob and his partner based on ownership interest or 50/50. Required: 1. Calculate Bob's tax basis in ABC partnership interest on December 31, 2021. 2. If Bob sold his entire interest to Jack on January 1, 2022 for $200,000, calculate Bob's gain or loss on the sale assuming that ABC at the time of the sale did not have any "Hot Assets".
Give me correct answer with explanation.j
SEE ATTACHED
Haresh
None
a. What are the amount and character of Megan's recognized gain or loss? b. What is Megan's basis in the distributed assets? c. What are the amount and character of Matthew's recognized gain or loss? d. What is Matthew's basis in the distributed assets?
2. On January 1, 2022, C and D form an equal partnership to which C contributes machinery with a tax basis of (a) $2,000 and a fair market value of (b) $3,000. D contributes cash of (b) $3000 The machinery is being depreciated on a straight-line basis and has a remaining life of five years. The partnership also has ordinary income of (c) $280 A. Using the traditional method, determine the tax basis and Sec. 704(b) book basis depreciation for C and D for Year 1. Depreciation Depreciation Ordinary income Tax Tax C с Book B. Assume, instead, that the basis of the equipment contributed by C is only (d) $800 at the time of contribution. All the other facts are the same. Using the traditional method with curative allocations, determine the tax basis and Sec. 704(b) book basis depreciation for C and D for Year 1. Also, show the allocation of the ordinary income to C and D for the current year. Tax Book D Tax Book D Book
Please show detailed calculations and explanations. Answers without showing calculations/explanations, will not receive credit. Randolph is a 30 percent partner in the RD Partnership. On January 1, RD distributes $20,500 cash and inventory with a fair value of $55,000 (inside basis of $27,500) to Randolph in complete liquidation of his interest. RD has no liabilities at the date of the distribution. Randolph's basis in his RD Partnership interest is $50,825. What is the amount and character of Randolph's gain or loss on the distribution?