Income Tax Fundamentals 2020
38th Edition
ISBN: 9780357391129
Author: WHITTENBURG
Publisher: Cengage
expand_more
expand_more
format_list_bulleted
Question
Chapter 10, Problem 13P
To determine
Introduction:
The amount of wages and the amount of qualified property that will be allocated to J.
Expert Solution & Answer
Trending nowThis is a popular solution!
Students have asked these similar questions
Janie owns a 30 percent interest in Chang Partnership. Chang has W-2 wages of $20,000 and qualified property of $900,000 in 2020. a.When computing the W-2 wages limitation, what is the amount of wages that will be allocated to Janie? $_____ b. What is the amount of qualified property that will be allocated to Janie? $_____
On January 1, 2024, Males contributes land in a partnership with Phillips. Males purchased the land in 2019 for $100,000. A real estate appraiser now values the land at $425,000. Males wants $425,000 capital in the new
partnership, but Phillips objects. Phillips believes that Males's capital contribution should be measured by the book value of his land. Phillips and Males seek your advice.
Read the requirements.
Requirement 1. Which value of the land is appropriate for measuring Males's capital-book value or current market value?
age
Males's capital contribution of land should be valued at
ur
Requirement 2. Give the partnership's journal entry to record Males's contribution in the business. (Record debits first, then credits. Select the explanation on the last line of the journal entry table.)
Date
Accounts and Explanation
Debit
Credit
Requirements
2024
Jan. 1
1. Which value of the land
value or current market value?
appropriate for measuring Males's capital-book
2. Give the…
On January 1, 2020, Mary and Jack form a partnership. Mary contributes $50,000 cash in exchange for a 50% interest. Jack contributes property with a tax basis of $70,000 and a fair market value of $50,000 in exchange for a 50% interest. Jack purchased the property on July 1, 2010.
Does Mary or Jack need to recognize any gain/loss on their contributions?
Chapter 10 Solutions
Income Tax Fundamentals 2020
Ch. 10 - Which of the following may not be treated as a...Ch. 10 - Prob. 2MCQCh. 10 - Prob. 3MCQCh. 10 - Prob. 4MCQCh. 10 - Prob. 5MCQCh. 10 - Prob. 6MCQCh. 10 - Abigail contributes land with an adjusted basis of...Ch. 10 - Prob. 8MCQCh. 10 - Prob. 9MCQCh. 10 - Prob. 10MCQ
Ch. 10 - Prob. 11MCQCh. 10 - Prob. 12MCQCh. 10 - Prob. 13MCQCh. 10 - Prob. 14MCQCh. 10 - Prob. 15MCQCh. 10 - Prob. 16MCQCh. 10 - Kendra is an attorney and owns 60 percent of a law...Ch. 10 - Prob. 18MCQCh. 10 - In 2019, Gloria, a single taxpayer, receives a...Ch. 10 - Prob. 20MCQCh. 10 - Prob. 21MCQCh. 10 - Prob. 22MCQCh. 10 - Prob. 23MCQCh. 10 - Prob. 1PCh. 10 - Prob. 2PCh. 10 - Prob. 3PCh. 10 - Prob. 4PCh. 10 - Prob. 5PCh. 10 - Prob. 6PCh. 10 - Prob. 7PCh. 10 - Prob. 9PCh. 10 - Prob. 10PCh. 10 - Prob. 11PCh. 10 - Prob. 12PCh. 10 - Prob. 13PCh. 10 - Prob. 14PCh. 10 - Prob. 15PCh. 10 - Prob. 16P
Knowledge Booster
Similar questions
- Alicia and Rafel are in the process of negotiating a divorce agreement to be finalized in 2019. They both worked during the marriage and contributed an equal amount to the marital assets. They own a home with a fair market value of 400,000 (cost of 300,000) that is subject to a mortgage of 250,000. They have lived in the home for 12 years. They also have investment assets with a cost of 160,000 and a fair market value of 410,000. Thus, the net worth of the couple is 560,000 (400,000 250,000 + 410,000). The holding period for the investments is longer than one year. Alicia would like to continue to live in the house. Therefore, she has proposed that she receive the residence subject to the mortgage, a net value of 150,000. In addition, she would receive 17,600 each year for the next 10 years, which has a present value (at 6% interest) of 130,000. Rafel would receive the investment assets. If Rafel accepts this plan, he must sell one-half of the investments so that he can purchase a home. Assume that you are counseling Alicia. Explain to Alicia whether the proposed agreement would be fair on an after-tax basis.arrow_forwardNell and Kirby are in the process of negotiating their divorce agreement, to be finalized in 2019. What should be the tax consequences to Nell and Kirby if the following, considered individually, became part of the agreement? a. In consideration for her one-half interest in their personal residence. Kirby will transfer to Nell stock with a value of 200,000 and 50,000 of cash. Kirbys cost of the stock was 150,000, and the value of the personal residence is 500,000. They purchased the residence three years ago for 300,000. b. Nell will receive 1,000 per month for 120 months. If she dies before receiving all 120 payments, the remaining payments will be made to her estate. c. Nell is to have custody of their 12-year-old son. Bobby. She is to receive 1,200 per month until Bobby (1) dies or (2) attains age 21 (whichever occurs first). After either of these events occurs, Nell will receive only 300 per month for the remainder of her life.arrow_forwardW owes Y, the managing partner of XYZ Partnership, P50,000 due on Oct. 1, 2021. W also owes XYZ partnership P100,000 due on Oct 31, 2021. If W pays the managing partner P50,000. How will the payment be applied? Explain.arrow_forward
- 1. In 2020, Joanne invested $90,000 for a 20% interest in a partnership in which she is a material participant. The partnership reported losses of $340,000 in 2020 and $180,000 in 2021. Joanne’s share of the partnership losses was $68,000 in 2020 and $36,000 in 2021. How much of these losses can Joanne deduct on her tax return? $0 in 2020; $0 in 2021. $68,000 in 2020; $22,000 in 2021. $68,000 in 2020; $36,000 in 2021. $68,000 in 2020; $0 in 2021.arrow_forwardThe CAT Partnership earned ordinary income of $144,000 in 2019. The partnership has three equal partners, Carl, Allen, and Tom. Tom, who is single, uses the standard deduction, and has other income of $20,000 (not connected with the partnership) in 2019. He receives a $33,000 distribution from the partnership during the year. What is Tom's taxable income in 2019? (If an input field is not used, leave the input field(s) empty. Do not select a label or enter a zero. Assume that the partnership is not eligible for the QBI deduction.) Adjusted gross income (AGI) Minus: Deductions from AGI: Tom's taxable income Choose from any list or enter any number in the input fields and then click Check Answer. All parts showing Clear All Check Answer Reference STANDARD DEDUCTION Filing Status Married…arrow_forwardIn the year 2023, with the social security wage cap set at $160,200, Alex obtained a $100,000 income distribution from a partnership where Alex served as a general partner. This distribution represents Alex's sole income for that year. What amount of self-employment tax does Alex owe? Round the final figure to the nearest whole dollar. None of the choices is correct. $2,900 $15,300 O $14,130 $3,824arrow_forward
- In 2021, Fred invested $127,000 in a general partnership. Fred's interest is not considered to be a passive activity. If his share of the partnership losses is $88,900 in 2021 and $62,230 in 2022, how much can he deduct in each year? Fred can deduct $ Feedback ▼Check My Work X in 2021 and $ X in 2022. The at-risk rules limit the deductibility of losses from business and income-producing activities.arrow_forwardRochelle is a limited partner in Megawatt Partnership. For 2021, her schedule K-1 from the partnership reported the following share of partnership items: Ordinary income: $25,000 Section 1231 loss: (3,000) Nondeductible expense: 1,000 Cash distribution: 5,000 Required: a. Calculate the net impact of the given items on Rochelle's 2021 taxable income. Assume that Rochelle does not qualify for the QBI deduction. b. Assume that Rochelle's marginal tax rate is 35 percent. Calculate her 2021 after-tax cash flow as a result of her interest in Megawatt.arrow_forwardThe SON Partnership earned ordinary income of $135,000 in 2021. The partnership has three equal partners, Seth, Oliver, and Nolan. Nolan, who is single, uses the standard deduction, and has other income of $19,000 (not connected with the partnership) in 2021. He receives a $31,000 distribution from the partnership during the year. What is Nolan's taxable income in 2021? (If an input field is not used, leave the input field(s) empty. Do not select a label or enter a zero. Assume that the partnership is not eligible for the QBI deduction.) (Click the icon to view the standard deduction amounts.) Adjusted gross income (AGI) Minus: Deductions from AGI: Nolan's taxable incomearrow_forward
- Blake and Ryan form the Poole Partnership. Blake contributes cash of $15,000. Ryan contributes land with an adjusted basis of $10,000 and a fair market value of $21,000. The land is subject to a $6,000 mortgage that Poole assumes. Blake and Ryan both receive a 50 percent interest in Poole. What is Ryan's recognized gain or loss on the contribution? a.$11,000 loss b.$5,000 gain c.$16,000 gain d.$4,000 loss e.None of these choices are correct.arrow_forwardIn 2020, Ryce contributes nondepreciable property with an adjusted basis of $60,000 and a fair market value of $95,000 to the Montgomery Partnership in exchange for a one-half interest in profits and capital. In 2021, when the property's fair market value is $100,000, the partnership distributes the property to Jarvis, the other one-half partner. Which partner must recognize the built-in gain and what is the amount recognized? What is the effect on that partner's basis in the partnership interest? must recognize the $fill in the blank 2 built-in gain in . He his basis in his partnership interest by the gain recoarrow_forwardD FALCO, D LEVI, D ZEKE formed a partnership on April 1, 2020. They agreed that D FALCO will contribute office equipment with a total fair value of P320,000; D LEVI will contribute delivery equipment with a fair value of P640,000; and D ZEKE will contribute cash. If D ZEKE wants a 1/3 interest in the capital and profits, he should contribute cash in the amount of? Your answerarrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Individual Income TaxesAccountingISBN:9780357109731Author:HoffmanPublisher:CENGAGE LEARNING - CONSIGNMENT
Individual Income Taxes
Accounting
ISBN:9780357109731
Author:Hoffman
Publisher:CENGAGE LEARNING - CONSIGNMENT