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T11F-Chp-14-3-Important Computations-Problem

# T11F-Chp-14-3-Important Computations-Problem - Page 1 Page...

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Page 1 0f9a21ec2f66bc0afeea78c464f0a4da4a1f2641.xls Page 1 of 3 1 Service Partnership Form 1065 Separate on Sch- K-1 Page John owns 50% Information Page 1 Sched-K John (50%) 14-4 Consulting revenue 125,000 125,000 Transportation 40,000 Office expense 3,000 Dividends on IBM stock 4,000 Separate Interest on IBM Bonds 2,000 Separate Charitable Contributions 1,000 Separate Political contributions 6,000 No Ded. Ordinary income for partnership and John Ordinary All of John's income, gains, losses or deductions are from the partnership. John does not take a distribution from the partnership. What is John's gross income on his Form 1040? How much of John's gross income has a special tax rate? How much self-employment income does John report? John's beginning basis: \$100,000. What is his ending basis? 2 Gil & Bill are partners in the Gil and Bill Partnership. Gil is a 40% partner The partnership had book net income of \$37,000. Information Ordinary Income Gil Book net income (includes items below) 40,000 40,000 16,000 Dividend income 1,000 Short-term capital loss (5,000) Section 1231 gain 10,000 Ordinary income (section 1245 recapture) 4,000 Interest income on corporate bonds 15,000 Ordinary Income Partnership ORDINARY income reported on Gil's Form 1040? 14-5 3 Beth invested \$10,000 for a 25% interest in XYZ Partnership on 12-31 of Year-1. In Year-2, XYZ had taxable income of \$20,000, and municipal interest of \$8,000. XYZ Partnership made a cash distribution to Beth of \$8,000. How much income does Beth report for Year-2? 14-5 What is Beth's basis in partnership at the end of Year-2? 14-8 XYZ Partnership Beth Beth's Beginning Basis in her stock 10,000 Investment Change in share of debt (+ or -) Add: Ordinary Income Separate Income & gains Tax-free income Contributions of Capital Less: Ordinary Loss Separate Expenses & Losses Non-deductible Expenses

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