p 73 The AB partnership is a law firm C an associate in the firm is offered a

P 73 the ab partnership is a law firm c an associate

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4.Problem 1 (p. 73).The AB partnership is a law firm. C, an associate in the firm, is offered a one-third partnership interest in the future profits of the partnership. C is not required to make any capital contribution. Is C taxable upon his admission to the partnership? 5.Problem 2 (p. 74).C, an experienced real estate manager, receives a nonforfeitable one-tenth profits interest in the AB general partnership, whose sole asset is a commercial building with a value of $1,000,000 in return for his agreement to render management services in his capacity as a partner. Net rentals from the building recently have been averaging $100,000 per year. has been asked to manage the building in the hope that his expertise will increase the rental income and ultimately lead to a profitable sale of the property.a.(a) What are the tax consequences to C upon receipt of the profits interest? C b.(e) What result to C and to the partnership in (a), above, if C’s profits interest was subject to forfeiture until C rendered services for the partnership for a period of five years? .2.Problem 2 (p. 74).C, an experienced real estate manager, receives a nonforfeitable one-tenth profits interest in the AB general partnership, whose sole asset is a commercial building with a value of $1,000,000 in return for his agreement to render management services in his capacity as a partner. Net rentals from the building recently have been averaging $100,000 per year. has been asked to manage the building in the hope that his expertise will C 31
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