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Meg and Abby are equal partners in the AM Partnership, which earns $40,000 ordinary income, $6,000 long-term capital gain (LTCG), and $2,000 Sec. 1231 loss during the current year. What is the amount andcharacter of income that must be reported on Abby's tax return for this year's partnership operations? A) $20,000 ordinary income, $3,000 LTCG, $1,000 Sec. 1231 loss B) $19,000 ordinary income, $3,000 LTCG C) $23,000 ordinary income, $1,000 Sec. 1231 loss D) $22,000 ordinary income$20,000 ordinary income, $3,000 LTCG, $1,000 Sec. 1231 lossOn December 31 of last year, Alex and Jackson become equal partners in the AJ Partnership with assets having a tax basis and FMV of $120,000. The partnership, which deals in securities, had no liabilities at the end of last year. In January of this year, Franklin contributes his investment securities with an FMV of$60,000 (purchased two years ago at a cost of $45,000) to become an equal partner in the new AJF Partnership. The securities, which are inventory to the partnership, are sold on December 15 of the currentyear for $90,000. What amount and character of gain from the sale of these securities should be allocated to Franklin?
At the formation of the BD Partnership, Betty contributes land with a basis of $10,000 and an FMV of $30,000 and Dick contributes cash of $30,000. Betty and Dick share profits and losses equally. When the land is sold two years later for $50,000, Betty must recognize a gain of Identify which of the following statements is false.The BB Partnership wants to make a special allocation of $10,000 of long-term capital gain to Bob and a special allocation of $10,000 of ordinary income to Briana. This allocation will have a substantial economic effect.William and Irene each contribute $20,000 cash to the WI Partnership on January 1 of last year. William and Irene share profits and losses equally. Last year, the partnership reported tax-exempt interest income of $4,000. This year, each partner receives $1,000 of the tax-exempt interest income in a cash distribution.There are no partnership liabilities and no other income, loss, contributions, or distributions during both years. William's basis in the partnership interest following these transactions is A) $19,000. B) $20,000. C) $21,000. D) $22,000.$21,000.