HW#5 Tax Chapter 21

HW#5 Tax Chapter 21 - realized gain or loss is deferred. b....

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HW # 5 – Chapter 21 Discussion Question 9, 17 and 40 9. -The following operating results increase a partner’s adjusted basis: --The partner’s proportionate share of partnership income (including capital gains and tax-exempt income). --The partner’s proportionate share of any increase in partnership liabilities. -The following operating results decrease the partner’s adjusted basis in the partnership: --The partner’s proportionate share of partnership deductions and losses (including capital losses). --The partner’s proportionate share of nondeductible expenses. --The partner’s proportionate share of any reduction in partnership liabilities. 17. The gain or loss realized by the transferor is the difference between the fair market value of the consideration received and the adjusted basis of the property transferred. a. carol - $20,000 gain, connie - $60,000 loss -In most situations however, neither the partner nor the partnership recognizes the realized gain or loss when a partner contributes property to a partnership in exchange for a partnership interest, instead the
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Unformatted text preview: realized gain or loss is deferred. b. they won’t recognize any gain or loss c. carol basis - $40,000 Connie - $30,000 d.. The partnerships basis in the asset is equal to the partners basis in the property prior to its transfer to the partnership.- $60,000, and $90,000, so $150,000 basis e. inside basis refers to the adjusted basis of each partnership asset, as determined from the partnerships tax accounts. Outside basis represents each partner’s basis in the partnership interest. Each partner “owns” a share of the partnerships inside basis for all its assets, and all partners should maintain a record of their respective outside bases. f. If depreciable property is contributes to the partnership, the partnership is usually required to use the same cost recovery method and life used by the partner. The partnership merely “steps into the shoes” of the partner and continues the same cost recovery calculations. 40....
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This note was uploaded on 05/05/2010 for the course ACC 369 taught by Professor Smith during the Spring '10 term at Ben-Gurion Uni..

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