ACC 67989.docx - Gross Receipts inventory sales COGS Salaries to Non partners Depreciation Advertising Interest expense on investment margin account of

ACC 67989.docx - Gross Receipts inventory sales COGS...

This preview shows page 1 - 2 out of 3 pages.

Gross Receipts inventory sales 250000 COGS -75000 Salaries to Non partners -25000 Depreciation -30000 Advertising -20000 Interest expense on investment margin account of CD -15000 Gain from sale of machine held for two years 1245 gain 20000 1231 gain 5000 Dividends 17500 Charitable Contributions -2000 Tax-exempt interest 1250 STCG stock 15000 LTCG stock 10000 LTCL stock -5000 1231 gain on casualty to machine held for two years 2500 (a) How and when will CD, C and D report the income and who will be liable for the taxes? (b) Assume this is the first year of partnership operations, C's basis is $175,000 and D's basis is $100,000. What are the tax consequences to C and D from the first year of operations for CD? (Meaning: show combined vs. separately stated items and then show their bases change because of the ordinary and separately stated income items) (c) What would be the result in (b) if the partnership elected to distribute $50,000 cash to each partner at the end of the year? Question 2 C and D each contribute $300,000 upon formation of a limited partnership. C is a general partner and D is a limited partner. The partnership purchases a commercial building on leased
Image of page 1
Image of page 2

You've reached the end of your free preview.

Want to read all 3 pages?

  • Summer '20
  • Corporation, Expense, Limited partnership, Types of business entity, partner

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture