Exam 14: Partnership Taxation

Sabrina has a $12,000 basis in her S&B partnership interest.Sabrina receives a current cash distribution of $10,000 and equipment with a $5,000 basis (FMV $6,000).What is Sabrina's basis in the equipment received?

All income/gain and expense/loss items affect a partner's basis in his or her partnership interest.

Callie contributes the following assets to a partnership in exchange for a 30% partnership interest: FMV Basis Cash \ 40,000 \ 40,000 Computers \ 15,000 \7 ,000 Equipment \ 25,000 \1 5,000 What is Callie's beginning basis in her partnership interest?

The sale of a partnership interest is similar to the sale of any capital asset and is reported by the partner on Schedule D of his or her individual tax return.

Bethany contributes a building to a partnership with a basis of $120,000 and a FMV of $200,000.Bethany's basis in her partnership interest would:

Partnership income and losses are divided into two components: ordinary items and separately stated items.

A guaranteed payment is treated as:

Caroline,Jessica,and Samantha form a partnership.Caroline contributes a building,Jessica contributes cash and Samantha will operate the business. FMV Basis Partnership \% Caroline's Building \ 400,000 \ 100,000 20\% Jessica's Cash \ 400,000 \ 400,000 20\% Samantha's Services \0 \0 60\% How much income must Samantha recognize?

Generally,guaranteed payments do not have an impact on a partner's basis in the partnership interest.

A partner never recognizes a gain or loss on the formation of a partnership.

Which of the following items increases a partner's basis in his or her partnership interest?

All income and expense items of a partnership that may be treated differently at the partner level must be "separately stated."

A partnership has $23,000 of depreciation expense and $25,000 of Section 179 expense.How are the depreciation and Section 179 expenses reported?

A partner had the following items reported on a partnership Schedule K-1: Ordinary income \2 7,000 Interest income 4,500 Dividend income 2,000 Guaranteed payment 15,000 Section 179 expense 16,000 The partner's self-employment income for the year is:

Which of the following is reported as ordinary income or expense from a partnership?

A partner's share of recourse liabilities increases the partner's basis in his or her partnership interest.

How does a partner treat premiums on health insurance provided by the partnership?

The general rule regarding income and expense items of a partnership and their classification is:

In 2016,Angel contributes land to a partnership with a basis of $12,000 and a FMV of $22,000.In 2017,when the FMV of the land is $28,000,the partnership distributes the land to Shelia,another partner.What is the gain or loss recognized by Angel on the distribution to Shelia?

Latesha contributes a building with a FMV of $125,000 and a basis of $115,000 to a partnership on January 4,2014.On December 15,2017,the partnership distributed the building to Katie,a partner in the same partnership.At distribution,the building had a FMV of $129,000. a.What is the effect of the distribution on Latesha,if any? b.What is the effect of the distribution to Katie?