Dan and Eva form equal DE partnership on January 1 20X1 Dan Eva and DE all use

Dan and eva form equal de partnership on january 1

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Dan and Eva form equal DE partnership on January 1, 20X1. Dan, Eva, and DE all use the calendar year. 124. In exchange for their respective interests in DE, Dan contributes $50,000 cash and Eva contributes land (held as a capital asset) worth $50,000. Eva’s basis in the land at the time of the exchange is $15,000. During 20X1, DE reports taxable income of $10,000, and during 20X1, DE distributes $25,000 to each partner. At the end of 20X1, DE’s recourse liabilities total $20,000. DE has no nonrecourse liabilities at the end of 20X1. At the end of 20X1 Dan and Eva’s tax basis in their respective interest in DE are: $35,000 and ($5,000), respectively. a. $35,000 and $0, respectively. b. $35,000 and $5,000, respectively. c. $40,000 and $5,000, respectively. d. $40,000 and $0, respectively. e. The AB general partnership agreement provides for guaranteed payments for services rendered of $50,000 125. and $80,000 for Andrew and Brenda, respectively. The services rendered are of a nature that the amount is deductible by AB in computing its ordinary income. After the guaranteed payments are deducted, the partnership agreement calls for sharing of profits and losses as follows: Andrew 45 percent; Brenda 55 percent. If AB’s ordinary income before taking the guaranteed payments into consideration is $200,000, what amount of total ordinary income from the partnership should each partner report on his or her individual income tax return? Andrew $81,500; Brenda $118,500. a. Andrew $69,500; Brenda $130,500. b. Andrew $50,000; Brenda $80,000. c. Andrew $140,000; Brenda $190,000. d. Andrew $119,500; Brenda $210,500. e. At the beginning of 20X3, Margaret’s tax basis in her 30 percent interest in MP partnership is $3,000. 126. During 20X3, Margaret does not make any additional contributions to MP and her share of MP liabilities does not change. During 20X3, MP distributes $5,000 to Margaret and reports the following items of partnership income, deduction, gain and loss.Taxable income$15,000Tax-exempt interest6,000Section 1231 loss(10,000)Margaret’s tax basis in MP at the end of 20X3 equals: d. Which of the following partnership items is not required to be separately stated? 127. Real estate taxes. 128. Partner Ownership Interest Tax Year End A 12% March 31 B 28% November 30 C 8% July 31 D 39% March 31 E 12% November 30 F 1% November 30
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674 CCH Federal Taxation—Basic Principles Chapter 16 © 2010 CCH. All Rights Reserved.
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