AB Partnership has the following assets and liabilities at year end. The book basis and tax basis are the same amount.Machine. Basis: $10,000 Value:$18,000
Building. Basis: $80,000 Value:$100,000
Note 1. Basis $15,000 Value: $15,000
Note 2. Basis: $90,000 Value: $90,000Note 1 is a recourse note attached to the machine; Note 2 is a nonrecourse note attached to the building. What is the amount of the partnerships minimum gain?$0
$3,000
$10,000
$15,000
X, Y, and Z are equal partners in the XYZ Partnership and share profits and losses accordingly. At the end of 20X1, the partnerships capital accounts reflect the following numbers due to a special allocation of depreciation:Capital X = $40,000
Capital Y = ($10,000)
Capital Z = ($20,000)If all of the assets sold for $10,000, which of the following statements is true?X shares in Y and Z's contribution.
X takes Y and Z's entire contribution
Y contributes nothing.
Y shares in Z's capital contribution.
After the special allocation of depreciation, the capital balances for Y & Z would still be negative, and they would have to contribute money to cover the deficit so that X recoups his $40,000
Therefore the correct choice is:
6 years ago
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