53. Rachael and Ray form an equal partnership R&R on January 1, 20X1. Rachael contributes $100,000 in exchange for her one-half interest; Raycontributes land worth $170,000, which is subject to a $70,000 debt, which R&R assumes. Ray's adjusted basis in the land is $30,000. Which of the following statements is accurate with respect to this exchange?a. Ray does not recognize any gain or loss on the exchange and his tax basis in R&R is $30,000.b. Ray does not recognize gain on the exchange and his tax basis in R&R is $100,000.*c. Ray recognizes $5,000 gain on the exchange and his tax basis in R&R is $0.d. Ray recognizes $70,000 gain on the exchange and his tax basis in R&R is $100,000.54. Debra Wallace and Joan Pederson are equal partners in the capital and profits of Wallace & Pederson, but are otherwise unrelated. On August 1, 2013, Wallace sold 100 shares of Kiandra Mining Corporation stock to the partnership for its fair market value of $7,000. Wallace had bought the stock in 1998 at a cost of $10,000. What is Wallace's recognized loss in 2013 on the sale of this stock?55. Malcolm Smith, a dealer in securities, is a 60 percent owner of theReal Partnership which on July 1, 2013, sold to him Acme Securities which it had held as an investment for three years. The basis of the securities to Real was $40,000; the sales price to Malcolm was $100,000. On his 2013 tax return, Malcolm should report income of the character and amount of:
56. Bill Burns and Bob Smarts were two equal partners in B&B, a calendar year partnership. On January 1, 2013, when the total value of the partnership was $120,000, Bill and Bob admitted Charles Chubbs as an equal partner by crediting his capital account with $40,000 in payment of services which Charles had rendered the B&B partnership. Thepartnership's ordinary net income for 2013 was $60,000. As of December 31, Charles's basis in his partnership interest and his 2013 reportableincome from the partnership are:57. In March 2013, Davis Durham entered a partnership by contributing to the partnership $10,000 cash and machinery which had an adjusted basis to him of $6,000 and a fair market value of $9,000. Davis acquired the machinery in 2007 at a cost of $12,000. His capital account was credited for $20,000 which constituted one-fourth of total partnership capital, and goodwill was recorded for the difference. Whatare the tax effects to Davis upon this transfer to the partnership?a. Long-term capital gain of $3,000b. Ordinary income of $3,000c. Long-term capital gain of $3,000; ordinary income of $1,000*d. None of the above
You've reached the end of your free preview.
Want to read all 26 pages?
- Spring '10
- Limited partnership, partner