Individual Income Taxes
43rd Edition
ISBN: 9780357109731
Author: Hoffman
Publisher: CENGAGE LEARNING - CONSIGNMENT
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Question
Chapter 7, Problem 42P
To determine
State the implications of the loss for Person T and Person P.
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Timothy Gates and Prada Singh decide to form a new company, TGPS LLC (a multimember LLC that will report its operations as a
partnership). Timothy is married, and Prada is single. Each contributes $400,000 of capital to begin the business, and both materially
participate in the business. In 2023, TGPS reports a net loss of $610,000. What are the implications of this loss for Timothy and Prada?
If an amount is zero, enter "0".
Timothy has an excess business loss of $
loss to offset nonbusiness income
0. He may use !
305,000 of his share of the $610,000 LLC business
✓.
Prada has an excess business loss of $
28,000 X. She may use $
262,000 X of her share of the $610,000 LLC business
loss to offset nonbusiness income
Any excess business loss is treated as part of the taxpayer's NOL carryforward
✓.
the early part of 2021, the partners of HughJacobs, and Thomas sought assistance from a local accountant. They had begun a new business in 2020 but had never used an accountant's services Hugh and Jacobs began the partnership by contributing $150,000 and $100,000 in cash, respectivelyHugh was to work occasionally at the business, and Jacobs was to be employed full-time. They decided that year-end profits and losses should be assigned as follows: Each partner was to be allocated 10 percent interest computed on the beginning capital balances for the period A compensation allowance of $5,000 was to go to Hugh with a $25,000 amount assigned to Jacobs Any remaining income would be split on a 4:6 basis to Hugh and Jacobs, respectively 2020, revenues totaled $175,000, and expenses were $146,000 (not including the partnerscompensation allowance)Hugh withdrew cash of $9,000 during the year, and Jacobs took out $14,000. In addition, the business paid $7,500 for repairs made to Hugh's home and…
In the early part of 2021, the partners of Hugh, Jacobs, and Thomas sought assistance from a local accountant. They had begun a new
business in 2020 but had never used an accountant's services.
Hugh and Jacobs began the partnership by contributing $155,000 and $105,000 in cash, respectively. Hugh was to work occasionally
at the business, and Jacobs was to be employed full-time. They decided that year-end profits and losses should be assigned as
follows:
• Each partner was to be allocated 10 percent interest computed on the beginning capital balances for the period.
• A compensation allowance of $8,000 was to go to Hugh with a $25,000 amount assigned to Jacobs.
• Any remaining income would be split on a 4:6 basis to Hugh and Jacobs, respectively.
In 2020, revenues totaled $180,000, and expenses were $149,000 (not including the partners' compensation allowance). Hugh
withdrew cash of $9,000 during the year, and Jacobs took out $14,000. In addition, the business paid $8,000 for repairs…
Chapter 7 Solutions
Individual Income Taxes
Ch. 7 - Prob. 1DQCh. 7 - Prob. 2DQCh. 7 - Prob. 3DQCh. 7 - Prob. 4DQCh. 7 - Many years ago, Jack purchased 400shares of Canary...Ch. 7 - Scan is in the business of buying and selling...Ch. 7 - Prob. 7DQCh. 7 - Prob. 8DQCh. 7 - Prob. 9DQCh. 7 - Prob. 10DQ
Ch. 7 - Prob. 11DQCh. 7 - Prob. 12DQCh. 7 - Prob. 13DQCh. 7 - Prob. 14DQCh. 7 - Prob. 15DQCh. 7 - Prob. 16DQCh. 7 - Prob. 17DQCh. 7 - Prob. 18DQCh. 7 - Prob. 19DQCh. 7 - Prob. 20DQCh. 7 - Last year Aleshia identified 15,000 as a...Ch. 7 - Prob. 22CECh. 7 - Prob. 23CECh. 7 - Prob. 24CECh. 7 - Prob. 25CECh. 7 - Belinda was involved in a boating accident in...Ch. 7 - Prob. 27CECh. 7 - Prob. 28CECh. 7 - Prob. 29CECh. 7 - Phillis and Trey are married and file a joint tax...Ch. 7 - Emily, who is single, sustains an NOL of 7,800 in...Ch. 7 - Prob. 32PCh. 7 - Monty loaned his friend Ned 20,000 three years...Ch. 7 - Sally is in the business of purchasing accounts...Ch. 7 - Prob. 35PCh. 7 - Prob. 36PCh. 7 - Olaf lives in the state of Minnesota. In 2019, a...Ch. 7 - Prob. 38PCh. 7 - On July 24 of the current year, Sam Smith was...Ch. 7 - Prob. 40PCh. 7 - During 2019, Leisel, a single taxpayer, operates a...Ch. 7 - Prob. 42PCh. 7 - Prob. 43PCh. 7 - Xinran, who is married and files a joint return,...Ch. 7 - During 2019, Rick and his wife, Sara, had the...Ch. 7 - Soong, single and age 32, had the following items...Ch. 7 - Prob. 47PCh. 7 - Prob. 48PCh. 7 - Assume that in addition to the information in...Ch. 7 - Jed, age 55, is married with no children. During...Ch. 7 - Prob. 51CPCh. 7 - Mason Phillips, age 45, and his wife, Ruth, live...Ch. 7 - During 2019, John was the chief executive officer...Ch. 7 - Prob. 2RP
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