be allocated fifty percent (50%) of the F&F Partnership's Profits or Losses for the current year. After deducting the $35,000 Guaranteed Payment to Fortune, F&F Partnership has a Net Loss of ($25,000). Fortune's basis in her Partnership Interest was $10,000 before considering any of these items. (a) How much, if any, of the $25,000 Partnership Net Loss will be allocated to Fortune for the current year? What is Fortune's Allowed Loss for the current year? (b) What is the Net Income from the Partnership that Fortune must report on her Federal Income Tax Return for the current year? (c) What is Fortune's basis in her Partnership Interest after the allocation of the Guaranteed Payment and Net Loss? 6. Doina, a calendar year individual, owns thirty percent (30%) owner of Sirbu Partnership which was formed on February 1, 2016 and has a January 31 fiscal year-end. She receives a $5,000 per month salary as a Guaranteed Payment and the Sirbu Partnership generated a $200,000 Taxable Income for its tax year ending January 31, 2017. Doina uses the calendar year for tax reporting. (a) What is Doina's Adjusted Gross Income from the above payments for her 2016 and 2017 Federal Income Tax Returns? -3-
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- Spring '11
- basis, Taxation in the United States, ARM Partnership