1.Partner A performs $5,000 of contract-type Code Sec. 707(a) services for the ABC partnership in December of 2009, but does not get paid until January of 2010. A and ABC are both calendar-year taxpayers, but A is on the cash basis and ABC is on the accrual basis. When will A recognize it, and when will ABC deduct it?
2.Partner A of the equal general ABCD partnership contributes property (FMV = $200,000, basis = $20,000, associated liability = $120,000), to the partnership. A’s basis in her partnership interest before the contribution (including A’s share of partnership liabilities) is $30,000, and the partnership has liabilities of $80,000. The other partners also contribute property, so A’s interest in the partnership does not change. What is A’s gain or loss, if any, on the contribution, and what is A’s basis in the partnership after the contribution?
3.W is a partner in the equal WXYZ partnership. At the beginning of the year, his basis in his partnership interest is $40,000. On Feb. 1, W takes a draw against earnings of $30,000. On June 1, the partnership pays off $60,000 of debt. On Sept. 1, W gets a distribution of cash of $30,000 that is not a draw against earnings. The partnership’s income from the year is $200,000. What is the effect of each of these items on W’s basis?
4.A gain from any distribution, whether liquidating or current, will occur under what circumstances? Can a partner recognize a loss from a nonliquidating distribution?
5.When will a partner recognize a loss on a distribution from a partnership?
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