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ACCT 4420-hw16.docx - 16/ a) H realized a gain of...

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16/a)H realized a gain of $15,000($100,000-$75,000+$10,000). However, she cannotrecognize any gain on the contribution of assets to the partnership.b)H's basis in partnership interest is 75,000 + 10,000 = 85,000c)thed)The partnership basis of land is 10,00017/A) Wozniacki recognized $50,000 as compensation income which is equal to the valueof a one-half capital interest.Character of the Income = Ordinary Compensation IncomeB)Wozniacki’s basis in the LLC interest is $50,000.Jewel would treat this $50,000 as organization or start up expense and would beamortized by Wilcox. This Expense was incurred for tax planning services Wozniackirendered prior to the formation of the LLC.32/Legal fees: 709 organizational costsAdvertising for “Grand Opening”: 195 startup costAdvertising after Opening: 162 ordinary and necessary business expenseConsulting fee: 195 startup costRent: part 195 and part 162Utilities: part 195 and part 162Salaries: 162 ordinary and necessary business expensePayment: guaranteed paymentTax return: 162 ordinary and necessary business expenseTrade name and logo: 197 intangible assets
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Balance Sheet, Wozniacki

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