WK LT assignment upload - Chapter9932...

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Chapter 9 9-32 Partnership Income and Basis Adjustment Mark and Pamela are equal partners in MP Partnership.  The partnership, Mark and Pamela are calendar year  taxpayers.  The partneership incurred the following items in th current year: Sales $450,000  Cost of goods sold 210,000 Dividends on corporate investments 15,000 Tax exempt interest income 4,000 Section 1245 gain (recapture) on equipment sale 33,000 Section 1231 gain on equipment sale 18,000 Long term captial gain on stock sale 12,000 Long term captial loss stock sale 10,000 Short term captial loss on stock sale 9,000 Depreciation (no Sec 179 or bonus depreciation components) 27,000 Guaranteed payment to Pamela 30,000 Meals and entertainment expenses 11,600 Interest expense on loans allocable to:     Business debt 42,000     Stock investments 9,200     Tax exempt bonds 2,800 Principal payment on business loan 14,000 Charitable contributions 5,000 Distributions to partners ($40,000 each) 80,000 A) Compute the partnership's ordinary income and separately stated items B) Show Mark's and Pamel's shares of the items in Part a C) Compute Mark's and Pamela's ending bais in their partnership interest assuming        their beginning balances and $150,000 each Mark Pam Sales 450,000 Cost of goods sold -210,000 Gross profit 240,000 Sec 1245 gain 33,000 Minus: Ordinary expense      Depreciation 27,000      Guaranted payment 30,000      Business Interest 42,000      Melas and entertainment (50) 5,800 (104,800) Partnership ordinary income 168,200 84100 84100 Separately stated items Dividend income 15,000 7500 7500 Interest income 4,000 2000 2000 Sec 1231 gain 18,000 9000 9000 Net long term capital (12,000 - 10,000) 2,000 1000 1000 Short term captial loss (9,000) (4,500) (4,500) Investment interst expense (9,200) (4,600) (4,600) Charitable contributions 5,000  2,500  2,500  Non deductionel expensee 5,800  2,900  2,900  Non deductiable interest on loss 2,800  1,400  1,400  Beginning basses in partnership interest 150,000  150,000  Plus:  Partnership ordinary income 84,100  84,100             Dividend income 7,500  7,500             Interest income 2,000  2,000              Sec 1231 gain 9,000  9,000              Net long term capital gain  1,000  1,000  Minus Distributions (30,000) (30,000)    Reduction in partnership liabilities (7,000) (7,000)
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WK LT assignment upload - Chapter9932...

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