ACC 4302 Exam # 3 (Spring 2017) - ACC 4302 Spring 2017 Exam 3 Chapters 10 11 Name Date True\/False(10 Points 1 Blaine contributes property valued at

ACC 4302 Exam # 3 (Spring 2017) - ACC 4302 Spring 2017 Exam...

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ACC 4302 Spring 2017 Exam # 3 Chapters 10 & 11Name ___________________________________________ Date ___________________True/False (10 Points)1. Blaine contributes property valued at $50,000 (basis of $40,000) in exchange for a 25% interest in the BIKE Partnership. If the property is later sold for $70,000, gain of $10,000will be allocated to Blaine. ________2. Emma’s basis in her BBDE LLC interest is $60,000 at the beginning of the tax year. Herallocable share of LLC items are as follows: $20,000 of ordinary income, $2,000 tax-exempt interest income, and a $6,000 long-term capital gain. In addition, the LLCdistributed $10,000 of cash to Emma during the year. Assuming the LLC had no liabilitiesat the beginning or the end of the year, Emma’s ending basis in her LLC interest is$76,000. ________3. In a proportionate liquidating distribution in which the partnership is also liquidated,Ralph received cash of $30,000, accounts receivable (basis of $0, fair market value of$20,000), and equipment (basis of $0, fair market value of $10,000). Immediately beforethe distribution, Ralph’s basis in the partnership interest was $40,000. Ralph realizes and recognizes a loss of $10,000, and his basis is $0 in both the accounts receivable and theequipment. ________4. Several years ago, the Jaymo Partnership purchased 2,000 shares of ABCO stock(publicly traded) for $40,000; the stock now has a fair market value of $90,000. If thisstock is distributed to Jason in liquidation of his 30% partnership interest, it is treated as acash distribution of $75,000 and a property distribution of $15,000. Assume Jaymo ownsno other securities. ________5. Normally a distribution of property from a partnership does not result in gain recognition.However, a distribution of marketable securities may be treated, in part, as a distributionof cash that could result in gain recognition. ________Page 1of 8
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  • Spring '11
  • williams
  • Balance Sheet, fair market value, BIKE Partnership

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