Partner's basis
Cash Contributed
+Adjusted Basis of Property Contributed
+Any gain recognized on contributed property or services
+Share of partnership liabilities
-Partner's Liability assumed by partnership
On January 1, Year 1, Mr. Karl purchased 50% of Olive, Inc., an S corporation, for $75,000. At the end of Year 1, Olive, Inc., incurred an ordinary loss of $160,000. How much of the loss can Mr. Karl deduct on his personal income tax return for Year 1?
$75,000 - can not deduct more than your basis
Dean is a 25% partner in Target Partnership. Dean's tax basis in Target on January 1, Year 1, was $20,000. At the end of Year 1, Dean received a nonliquidating cash distribution of $8,000 from Target. Target's Year 1 accounts recorded the following items:
25,000
(52000*.25) - increase in basis =13,000
Subtract $8k distribution
Atlantic Partnership, an electing large partnership, had the following items for the current year:
Income from sales $500,000
Dividends on capital stock 2,000
Tax-exempt interest 500
Net rental income 5,000
Net long-term capital gain (28% basket) 4,000
Ne
$250k ordinary income, $3k long-term capital gain
While preparing a partnership tax return, the accountant discovered that ABC Partnership distributed property to Anne, a partner, in a nonliquidating transfer. No money was distributed to Anne during the year, the property was in the partnership for over
$0 gain, basis in partnership is reduced 5o $0, and basis in property received is $10k
Bob acquired a 50% interest in a partnership by contributing depreciable property that had an adjusted basis of $15,000 and a fair market value of $45,000. The property was subject to a liability of $32,000, which the partnership assumed for legitimate bu
$16,000
15,000-32000+(.5*32000)
Scott became a limited partner in the S&N Partnership with a $10,000 contribution on the formation of the partnership. The adjusted basis of his partnership interest at the end of the current year is $20,000, which includes his $15,000 share of partnershi
$5,000 capital gain
Capital gain or loss is recognized on the sale of a partnership interest. 25k realized-20k adjusted basis
Which one of the following statements regarding a partnership's tax year is true?
A partnership may elect to have a tax year other than the generally required tax year if the deferral period for the tax year elected does not exceed 3 months.
In the current year, Dave Burr acquired a 20% interest in a partnership by contributing a parcel of land. At the time of Burr's contribution, the land had a fair market value of $35,000, had an adjusted basis to Burr of $8,000, and was subject to a mortga
$0 - basis can not go below $0
$8k basis less $9600 liab relief
Ruth Lewis has adjusted gross income of $100,000 for 2017 and itemizes her deductions. On September 1, 2017, she made a contribution to a private nonoperating foundation (not a 50% charity) of stock held for investment for 2 years that cost $25,000 and ha
$20,000
Contributions are limited to 30% of the taxpayer's AGI. Contributions of long-term capital gain property to private corps are limited to 20%
Sam and Ann Jefferson filed a joint federal income tax return for the calendar year 2017. Among their cash expenditures during 2017 were the following:
$3,000 real estate tax on residence; $400 state and city sales taxes; $900 state income tax.
What is th
$3,900
Andrew is a 40% partner in the ABC Partnership, in which capital is a material income-producing factor. He gives one-half of his interest to his brother, John. During the current year, Andrew performs services for the partnership for which reasonable comp
$132,500 - A partnership agreement is disregarded to the extent a partner receives less than reasonable compensation for services. Of ABC's $200,000 gross income credited to Andrew and John, $65,000 must be allocated to Andrew for his services. The remain
A partnership is able to elect large-partnership status if it has at least how many partners in the preceding tax year?
100
Which of the following requirements must be met in order for a single individual to qualify for an additional standard deduction?
Must be age 65 or older or blind - yes
Must support dependent child or aged parent - no
The adjusted basis of Vance's partnership interest in Lex Associates was $180,000 immediately before receiving the following distribution in complete liquidation of Lex:
Fair Market Basis to Lex
Value Cash
$100,000 $100,000
Real estate
70,000 96,000
$80,000 - liquidating distribution is reduced by the amount of money received
An individual is a 50% partner who materially participates in Stone Partnership. The individual's adjusted basis at the beginning of the year was $0. Stone had a $70,000 loss from its business. Stone borrowed $30,000 from a bank of which $20,000 remained
$10,000
Could get $35,000, only deduct basis of $10k
A partnership had four partners. Each partner contributed $100,000 cash. The partnership reported income for the year of $80,000 and distributed $10,000 to each partner. What was each partner's basis in the partnership at the end of the current year?
$110,000
Fern received $30,000 in cash and an automobile with an adjusted basis and market value of $20,000 in a proportionate liquidating distribution from EF Partnership. Fern's basis in the partnership interest was $60,000 before the distribution. What is Fern'
$30,000
ABC corporation commenced business on July 20, Year 1. What is the final date at which ABC could file an election for S corporation status and be recognized as valid for the Year 1 tax year?
October 3 yr 1. You have 2 months and 15 days
Freeman, a single individual, reported the following income in the current year:
Guaranteed payment from services rendered to a partnership $50,000
Ordinary income from an S corporation $20,000
What amount of Freeman's income is subject to self-employment
$50,000
Baker is a partner in BDT with a partnership basis of $60,000. BDT made a liquidating distribution of land with an adjusted basis of $75,000 and a fair market value of $40,000 to Baker. What amount of gain or loss should Baker report?
$0 - only recognize gain to extent a money distribution exceeds the AB in the partnership interest immediately before its distribution
On August 1 of the current year, George Hart, Jr., acquired a 25% interest in the Wilson, Hart, and Company partnership by gift from his father. The partnership interest had been acquired by a $50,000 cash investment by Hart, Sr., 20 years ago. The basis
A long-term gain of $25,000
The at-risk limitation provisions of the Internal Revenue Code may limit
A partner's deduction for his or her distributive share of partnership losses.
A partnership's net operating loss carryover.
A partner's deduction for his/her distributive share of partnership losses
On June 1, 2017, Kelly received a 10% interest in Rock Co., a partnership, for services contributed to the partnership. Rock's net assets at that date had a basis of $70,000 and a fair market value of $100,000. In Kelly's 2017 income tax return, what amou
$10k ordinary income
Don and Warren formed an equal partnership to build drag-racing vehicles. Don contributed $5,000 in cash, and Warren contributed a truck with a fair market value of $5,000 and an adjusted tax basis of $4,500. They plan to use the truck for hauling parts a
Record the truck on the books at $4,500 and depreciate it over its remaining recovery period using the straight line method and mid yr convention
Partner's basis
Cash Contributed
+Adjusted Basis of Property Contributed
+Any gain recognized on contributed property or services
+Share of partnership liabilities
-Partner's Liability assumed by partnership
On January 1, Year 1, Mr. Karl purchased 50% of Olive, Inc., an S corporation, for $75,000. At the end of Year 1, Olive, Inc., incurred an ordinary loss of $160,000. How much of the loss can Mr. Karl deduct on his personal income tax return for Year 1?
$75,000 - can not deduct more than your basis
Dean is a 25% partner in Target Partnership. Dean's tax basis in Target on January 1, Year 1, was $20,000. At the end of Year 1, Dean received a nonliquidating cash distribution of $8,000 from Target. Target's Year 1 accounts recorded the following items:
25,000
(52000*.25) - increase in basis =13,000
Subtract $8k distribution
Atlantic Partnership, an electing large partnership, had the following items for the current year:
Income from sales $500,000
Dividends on capital stock 2,000
Tax-exempt interest 500
Net rental income 5,000
Net long-term capital gain (28% basket) 4,000
Ne
$250k ordinary income, $3k long-term capital gain
While preparing a partnership tax return, the accountant discovered that ABC Partnership distributed property to Anne, a partner, in a nonliquidating transfer. No money was distributed to Anne during the year, the property was in the partnership for over
$0 gain, basis in partnership is reduced 5o $0, and basis in property received is $10k
Bob acquired a 50% interest in a partnership by contributing depreciable property that had an adjusted basis of $15,000 and a fair market value of $45,000. The property was subject to a liability of $32,000, which the partnership assumed for legitimate bu
$16,000
15,000-32000+(.5*32000)
Scott became a limited partner in the S&N Partnership with a $10,000 contribution on the formation of the partnership. The adjusted basis of his partnership interest at the end of the current year is $20,000, which includes his $15,000 share of partnershi
$5,000 capital gain
Capital gain or loss is recognized on the sale of a partnership interest. 25k realized-20k adjusted basis
Which one of the following statements regarding a partnership's tax year is true?
A partnership may elect to have a tax year other than the generally required tax year if the deferral period for the tax year elected does not exceed 3 months.
In the current year, Dave Burr acquired a 20% interest in a partnership by contributing a parcel of land. At the time of Burr's contribution, the land had a fair market value of $35,000, had an adjusted basis to Burr of $8,000, and was subject to a mortga
$0 - basis can not go below $0
$8k basis less $9600 liab relief
Ruth Lewis has adjusted gross income of $100,000 for 2017 and itemizes her deductions. On September 1, 2017, she made a contribution to a private nonoperating foundation (not a 50% charity) of stock held for investment for 2 years that cost $25,000 and ha
$20,000
Contributions are limited to 30% of the taxpayer's AGI. Contributions of long-term capital gain property to private corps are limited to 20%
Sam and Ann Jefferson filed a joint federal income tax return for the calendar year 2017. Among their cash expenditures during 2017 were the following:
$3,000 real estate tax on residence; $400 state and city sales taxes; $900 state income tax.
What is th
$3,900
Andrew is a 40% partner in the ABC Partnership, in which capital is a material income-producing factor. He gives one-half of his interest to his brother, John. During the current year, Andrew performs services for the partnership for which reasonable comp
$132,500 - A partnership agreement is disregarded to the extent a partner receives less than reasonable compensation for services. Of ABC's $200,000 gross income credited to Andrew and John, $65,000 must be allocated to Andrew for his services. The remain
A partnership is able to elect large-partnership status if it has at least how many partners in the preceding tax year?
100
Which of the following requirements must be met in order for a single individual to qualify for an additional standard deduction?
Must be age 65 or older or blind - yes
Must support dependent child or aged parent - no
The adjusted basis of Vance's partnership interest in Lex Associates was $180,000 immediately before receiving the following distribution in complete liquidation of Lex:
Fair Market Basis to Lex
Value Cash
$100,000 $100,000
Real estate
70,000 96,000
$80,000 - liquidating distribution is reduced by the amount of money received
An individual is a 50% partner who materially participates in Stone Partnership. The individual's adjusted basis at the beginning of the year was $0. Stone had a $70,000 loss from its business. Stone borrowed $30,000 from a bank of which $20,000 remained
$10,000
Could get $35,000, only deduct basis of $10k
A partnership had four partners. Each partner contributed $100,000 cash. The partnership reported income for the year of $80,000 and distributed $10,000 to each partner. What was each partner's basis in the partnership at the end of the current year?
$110,000
Fern received $30,000 in cash and an automobile with an adjusted basis and market value of $20,000 in a proportionate liquidating distribution from EF Partnership. Fern's basis in the partnership interest was $60,000 before the distribution. What is Fern'
$30,000
ABC corporation commenced business on July 20, Year 1. What is the final date at which ABC could file an election for S corporation status and be recognized as valid for the Year 1 tax year?
October 3 yr 1. You have 2 months and 15 days
Freeman, a single individual, reported the following income in the current year:
Guaranteed payment from services rendered to a partnership $50,000
Ordinary income from an S corporation $20,000
What amount of Freeman's income is subject to self-employment
$50,000
Baker is a partner in BDT with a partnership basis of $60,000. BDT made a liquidating distribution of land with an adjusted basis of $75,000 and a fair market value of $40,000 to Baker. What amount of gain or loss should Baker report?
$0 - only recognize gain to extent a money distribution exceeds the AB in the partnership interest immediately before its distribution
On August 1 of the current year, George Hart, Jr., acquired a 25% interest in the Wilson, Hart, and Company partnership by gift from his father. The partnership interest had been acquired by a $50,000 cash investment by Hart, Sr., 20 years ago. The basis
A long-term gain of $25,000
The at-risk limitation provisions of the Internal Revenue Code may limit
A partner's deduction for his or her distributive share of partnership losses.
A partnership's net operating loss carryover.
A partner's deduction for his/her distributive share of partnership losses
On June 1, 2017, Kelly received a 10% interest in Rock Co., a partnership, for services contributed to the partnership. Rock's net assets at that date had a basis of $70,000 and a fair market value of $100,000. In Kelly's 2017 income tax return, what amou
$10k ordinary income
Don and Warren formed an equal partnership to build drag-racing vehicles. Don contributed $5,000 in cash, and Warren contributed a truck with a fair market value of $5,000 and an adjusted tax basis of $4,500. They plan to use the truck for hauling parts a
Record the truck on the books at $4,500 and depreciate it over its remaining recovery period using the straight line method and mid yr convention