income tax unit10
cl152293
4065unit10-1.docxUsing your text, complete the following. In these problems, apply your knowledge of the rules and laws associated with tax reporting for the partnership form of business ownership.
· Problem 49, on page 14-39.
· Problem 51, on page 14-39.
· Problem 55, on page 14-40.
· Problem 56, on page 14-41.
· Problem 61, on page 14-42.
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49. On June 1 of the current year, Patti contributes equipment with a $45,000 basis and a $35,000 FMV in exchange for a partnership interest. She purchased the equipment three years ago. a. What is Patti’s basis in her partnership interest? b. What is Patti’s holding period of her partnership interest? c. What is the basis of the equipment in the hands of the partnership? d. What is the holding period of the equipment in the hands of the partnership? e. How will the partnership depreciate the equipment in the year of contribution?
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51. Moe, Johnny, and Raymond form a partnership and contribute the following assets:
Johnny’s building has a mortgage of $60,000, which the partnership assumes. a. Do any of the partners recognize any gain? If so, how much and why? b. What is the basis for each partner in his partnership interest? c. What is the basis to the partnership in each asset? d. How would your answer change with respect to Johnny if the basis in the building were $45,000? |
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55. Bryan and Gayle are equal partners in BG Partnership. The partnership reports the following items of income and expense: |
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Ordinary income from operations |
$13,000 |
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Interest income |
5,000 |
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Long-term capital gains |
23,000 |
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§ 179 expense |
55,000 |
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Charitable contributions |
3,000
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a. Which of these items are considered separately stated items? On what form will these items be reported to the partners?
b. Where will these amounts be reported by the partners?
56. Kim has a basis in her partnership interest of $12,000 when she receives a distribution from the partnership of $6,000 cash and equipment with a basis of $8,000 ($12,000 FMV).
a. How much gain or loss must Kim recognize on the distribution?
b. What is Kim’s ending partnership basis?
c. What is Kim’s basis in the equipment?
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61. Calvin purchased a 40% partnership interest for $43,000 in February 2017. His share of partnership income in 2017 was $22,000, in 2018 was $25,000, and in 2019 was $12,000. He made no additional contributions to or withdrawals from the partnership. On December 18, 2019, Calvin sold his partnership interest for $103,000. What is his gain or loss on the sale of his partnership interest? |
