Attached is a file of my study guide. I am quite in a rush to get


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Attached is a file of my study guide. I am quite in a rush to get this done so that I can study for my finals. Please finish the file today before 8pm tonight. Thank you in advance and let me know if i can be of any help. Best, Income tax final study guide.docx Chapters 9 and 10 1. Three individuals form a partnership sharing in profits and losses equally. Andy contributes $10,000 cash. Barney contributes $5,000 cash and land worth $5,000 in which he has a basis of $4,000. Cathy contributes machinery with a FMV of $16,000 subject to a mortgage of $6,000, which the partnership assumes. Her basis in the machinery is $16,000. a. What is each partner’s adjusted basis in the partnership? b. What is the partnership’s basis in the land and the machinery? 2. Morgan Partnership had the following items in the current year: Income from clients Dividend income Depreciation Operating expenses Repairs Charitable contributions Sec. 1245 gain Sec. 1231 gain $ 200,000 500 2,000 125,000 1,000 1,500 1,000 1,200 What is the partnership’s ordinary net income? 3. Pasha and Kris formed PK partnership on January 1 of the current year. Pasha contributed $10,000 cash. Kris contributed property with a FMV of $90,000 and a basis of $35,000. Pasha has a 10% interest in the partnership and Kris has a 90% interest. At the end of the year, PK had the following: Ordinary income Capital loss on sale of investment Tax-exempt interest income Non-deductible life insurance premiums paid on partners $25,000 800 200 500 Also, PK has the following liabilities as of the end of the year: Recourse loan Nonrecourse loan $ 10,000 5,000 a. What is Pasha’s basis in the partnership as of December 31? b. What is Kris’ basis in the partnership as of December 31? 4. XZ partnership has the following assets of January 1: Assets Cash Accounts receivable Inventory Property, plant and equipment Basis $ 5,000 9,000 30,000 10,000 FMV $ 5,000 9,000 36,000 16,000 The partnership agreed to admit Tuyen as a 1/3 partner in exchange for services valued at $22,000. a. b. c. d. What amount of taxable income, if any, does Tuyen report? What is Tuyen’s basis in the partnership? Does the partnership report anything because of admitting Tuyen? What is the partnership’s basis in the assets after Tuyen is admitted? 5. Charlene has a $20,000 basis in her partnership interest before receiving a current distribution of $8,000 in cash, inventory with a basis of $5,000, a parcel of land held by the partnership as an investment (basis $3,000), and equipment with a basis of $6,000. What is her basis in the land and equipment? 6. Ernie’s basis in a partnership was $65,000. His 50% share of partnership assets is: Cash Inventory Land Basis $ 60,000 15,000 15,000 FMV $ 60,000 20,000 5,000 In addition, the partnership has $20,000 in liabilities. This year, Ernie sold his partnership interest for its FMV plus release from his share of the liabilities. a. What is his total realized gain or loss on the sale? b. What is his total recognized gain or loss on the sale? c. What is the character of the gain or loss? 7. MUD partnership consists of three partners: Danny (25% share), Umberto (50% share), and Martin (25% share). Danny decides to sell his total interest to Terry. On the date of sale, the partnership had the following: Basis FMV Cash $ 10,000 $ 10,000 Accounts receivable 0 8,000 Inventory 16,000 17,600 Land 80,000 100,000 Danny’s basis in his partnership interest was $26,500 and the partnership has no liabilities. a. If he sells his interest for $35,000, what is his gain or loss realized and recognized? b. Does the partnership terminate? Explain. Chapter 11 8. Corporation Lex is a calendar year, S corporation. This year Lex reported ordinary loss of $182,500. Aurora and Beth were each 50% shareholders as of January 1. Aurora held her stock for 185 days before selling it to Chris. What is Aurora’s share of Lex’s loss? 9. Mary formed a calendar year S corporation on Janua

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