Chapter 14 Fall 2011

Chapter 14 Fall 2011 - Partner=s Outside Basis Tina...

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Partner = s Outside Basis Tina purchased an interest in TP Partnership on 1/1/11 for $50,000 cash when partnership recourse liabilities = $200,000. 2011 distributive shares for Tina are as follows: Ordinary Income $30,000 Long-term Capital Gains 10,000 Municipal Bond Interest 8,000 Charitable Contributions 1,000 Interest related to Municipal Bond 2,000 Cash Distributions 10,000 Liabilities at 12/31/11 Recourse = $180,000 a. Tina = s basis on 12/31/11 if she is a general partner w/ 40% interest in profit & losses? Burkett - 403- Chapter 14 1
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Burkett - 403- Chapter 14 2 General Formula for Maintaining Partner = s Capital Accounts Beginning Balance + Capital Contributions during the Year + Income Allocated For the Year - Partnership Distributions to the Partner - Losses Allocated For the Year Ending Balance A Capital (Equity) Account is maintained for each partner. It can be viewed as the (book) value of the partner = s interest, if the partnership liquidates. It does not take into account the changes in value of partnership assets (including goodwill). The analysis (change) in each partner = s capital account is shown on the partner’s schedule K-1, section L, appendix C-19 The analysis (change) in the sum total of all partner’s capital accounts are shown in schedule M-2, appendix C-18. The beginning & ending capital accounts on the M-2 should equal the beginning
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This note was uploaded on 02/22/2012 for the course ACCT 403 taught by Professor White during the Fall '11 term at South Carolina.

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Chapter 14 Fall 2011 - Partner=s Outside Basis Tina...

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