when the distribution is made.85. During the current year, MAC Partnership reported the following items of receipts and expenditures: $600,000 sales, $80,000 utilities and rent, $200,000 salaries to employees, $20,000 guaranteed payment to partner Antonio, investment interest income of $4,000, a charitable contribution of $8,000, and a distribution of $30,000 to partner Carl. Antonio is a 25% general partner. Based on this information, what items will be reflected on Antonio’s Schedule K-1? The partnership’s ordinary taxable income is:Sales$600,000 Utilities and rent(80,000)Salaries(200,000)Guaranteed payment to Antonio(20,000)Partnership ordinary income$300,000 The partnership also reports the following information:Separately stated interest income $4,000 Guaranteed payment to partner$20,000Separately stated charitable contribution $8,000 The distribution to Carl is not deductible by the partnership. Antonio’s share of the partnership’s ordinary income is $75,000 ($300,000 ´ 25%). Antonio also reports his separately stated share of interest income ($1,000, or $4,000 ´ 25%) and charitable contributions ($2,000, or $8,000 ´ 25%). Antonio’s K-1 will also show his guaranteed payment of $20,000, his net earnings from self-employment ($95,000 = $75,000 ordinary income + $20,000 guaranteed payment), and other information he might need in order to prepare his return (e.g., AMT or investment income information).
86. The LN partnership reported the following items of income and deduction during the current tax year: revenues, $300,000; cost of goods sold, $180,000; tax-exempt interest income, $2,000; salaries to employees, $80,000; and long-term capital gain, $10,000. In addition, the partnership distributed $20,000 of cash to 50% partner Nina and $10,000 of cash to 50% partner Len. What is Nina’s share of ordinary partnership income and separately stated items? The partnership’s ordinary taxable income is:Revenues $300,000 Cost of goods sold (180,000)Salaries (80,000)Partnership ordinary income $40,000Nina’s share ($40,000 ´ 50%) $20,000Separately stated tax-exempt income (not reported) $1,000Separately stated long-term capital gain (reported) $5,000The distributions to the partners are not deductible.87. Carli contributes land to the newly formed CD Partnership in exchange for a 30% interest. The land has an adjusted basis and fair market value of $300,000 and is subject to a liability of $100,000, which the partnership assumes. None of this liability is repaid at year-end. At the end of the year, the partnership has trade accounts payable of $20,000. Assume all liabilities are allocated proportionately to the partners. Total partnership incomefor the year is $400,000. What is Carli’s basis in her partnership interest at the end of the year? Carli’s basis in the partnership interest at the end of the year is determined as follows:Basis in land contributed to CD$300,000 Less: relief of liability assumed by partnership(100,000)Plus: share of liability related to land ($100,000 ´ 30%)30,000 Plus: share of trade accounts payable ($20,000 ´ 30%)6,000 Plus: share of partnership income120,000 Ending basis in partnership interest$356,000 88. An examination of the RB Partnership’s tax books provides the following information for the current year:Operating (ordinary) income before guaranteed payments$300,000 Long-term capital gain6,000
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