ACCT_753_Q1WW_9-2__Meet_Practice_Problems_9 - Pass-Through...

Pass-Through Entity Taxation | ACCT753-Q1WW-F14
9-2: Meet/Practice
Problems 9
9-2: Practice Problems 9
Start Date:
Mon, Nov 24
Due Date:
TBA, Week 9
Points
Points available: 25
Not yet graded.
Meet/Practice Problems 9
Purpose
To assess your ability to:
Apply the basis adjustments to partnership property – IRC Code Sections 734(b), 743(b).
Action Items
Complete the following problems from Chapter 13 in your textbook:
1.
13.1: The equal XYZ Partnership has the following balance sheets:
Basis FMV
Cash $54,000 $54,000
Land $15,000 $42,000
Unrealized Receivables $0 $15,000
Collectibles $3,000 $9,000
$72,000 $120,000
Liabilities $30,000 $30,000
Capital, X $14,000 $30,000
Capital, Y $14,000 $30,000
Capital, Z $14,000 $30,000
$72,000 $120,000
XYZ has a Code Section 754 election in effect, and X sells her interest to W for $30,000 cash.  How
much is the Code Sec. 743(b) adjustment?
13.2: The equal XYZ Partnership has the following balance sheets:
Basis FMV
Property A $39,000 $54,000
Property B $60,000 $42,000
Inventory A $3,000 $15,000
Inventory B $15,000 $12,000
$117,000 $123,000
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Capital, X $35,000 $41,000
Capital, Y $41,000 $41,000
Capital, Z
$41,000 $41,000
$117,000 $123,000
XYZ has a Code Section 754 election in effect, and X sells her interest to W for $41,000 cash.  The two
Properties are both capital assets.  Inventory A was contributed by X at a time when its unrealized
appreciation was $6,000.  At the time of the transfer, X’s share of the partnership’s basis in partnership
assets is $35,000.
How much is the Code Sec. 743(b) adjustment to each asset? a.