C12-Chp-10-9-Prob-Organ-and-Operate-Ptshp

C12-Chp-10-9-Prob-Organ-and-Operate-Ptshp - 1. Problem

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1. Problem 1ca45d6999cb3530e6f571815c3cba917077bc77.xls Page 1 of 4 Code Formation of a Partnership. Suzanne and Bob form the SB General Partnership as equal partners. They make the following contributions on 1/1/08: Basis to Individual Asset Partner FMV Suzanne Cash $60,000 $60,000 Bob Land 30,000 40,000 Building 60,000 100,000 The building and land are subject to a $80,000 recourse mortgage. The SB Partnership assumes this mortgage. The partners share the economic risk of loss on the mortgage equally. Bob has claimed $30,000 in S/L MACRS depreciation on the building. Do the values above indicate equal contribution by these two partners? 721 a. How much (and type of) gain or loss must each partner recognize on the formation of the partnership? _____________ 721 b. How much (and type of) gain or loss must the partnership recognize on the formation of the partnership? _____________ 722 b. What is each partner's basis in his or her partnership interest? _______ 723 c. What is the partnership's basis in each asset? ____________ d. What is the partnership's initial book value of each asset? ________ 704 c f. 724 b How much gain (and type) must the partnership and each partner report? g. Are there special rules for allocation of depreciation on the building? The partnership above operates in 2008 with the following results: Revenue from operations $200,000 Municipal bond interest income 5,000 Gross meals and entertainment costs for customers (8,000) Other expenses (other than guarnteed pmts.) (100,000) Charitable contributions (2,000) Guaranteed payments to partners (equal) (40,000) Net income per partnership Books
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C12-Chp-10-9-Prob-Organ-and-Operate-Ptshp - 1. Problem

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