Assignment 10 - Ch. 20.docx - Group Name Group Members...

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Group Name: Group Members: Assignment 10 (Chapter 20) (Total Possible Points: 100) ACCT 351/551 Note : Make sure the different problems and answers are clearly marked. If a multipart question, make sure it is clear which part the answer relates to. In addition, make sure to circle, highlight, or double underline your final answers. If you make it too difficult to find the answer within your work, I will not count the answer correct. If you have multiple answers, I will not count it correct even if one of the answers is correct. Staple multiple pages together and make sure your name is on each page. If pages come loose without a name, the grading will be only on what is left attached. Show your work throughout. If your answer is wrong and you do not show your work, then I cannot offer any partial credit. Round dollar amounts to the nearest dollar ($3,500.0372 $3,500). 1. Three individuals want to start a catering company and to operate it as an LLC, which will receive partnership tax treatment as the default for tax purposes. Chen contributes a van for transporting the food with a fair market value of $32,000 and an adjusted tax basis of $29,000 for a 25 percent profits and capital interest. Bo contributes a bakery shop with a fair market value of $230,000 and an adjusted tax basis of $175,000 for a 50 percent profits and capital interest. Jing contributes $60,000 in cash for a 25 percent profits and capital interest. The LLC does not have any debt (either from the partners or that it takes on directly from a bank). a. ( 4 points for each partner’s full answer ) Do any of the partners have to recognize a taxable gain (or loss) on the transactions above? If so, how much gain (loss) for each partner?

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