Assignment 1 (Acct 6222): Go to the facts in textbook problem 2 on page 74 in which C receives a 10% profits interest in the AB partnership (on January 1, 2010); however, assume that instead of a profits ONLY interest, that C receives a 10% capital (and profits) interest in the AB partnership. Assume that the building is worth $2,000,000 at the end of five years (the building was worth $1,000,000 on January 1, 2010). The building is the only asset of the partnership (no debt) on January 1, 2010. Assume that the partnership earns $100,000 of rental income each year. For simplicity, assume that the rental income increases cash by $100,000 each year. The partnership does not make any distributions to the partners (including C). Similar to problem 2(e), C’s 10% partnership interest is subject to forfeiture until C renders services to the partnership for a period of five years. Assume that the proposed regulations are finalized in their current form, and apply those regulations, and Notice 2005-43, to your answers. The partnership agreement provides that no part of the partnership’s compensation
This is the end of the preview.
access the rest of the document.