Exam 14: Partnership Taxation

Molly has a $15,000 basis in her partnership interest when she receives a liquidating distribution from the partnership.Molly receives cash of $6,000.What is Molly's recognized gain or loss on the liquidating distribution?

Parker,a 25% partner in Delta Partnership,has a basis of $25,000 in his partnership interest.Parker receives a cash distribution of $24,000 at year-end.What is Parker's recognized gain or loss?

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

Guaranteed payments are always determined with regard to partnership income.

If Janelle's partnership basis was $5,000 and she received a distribution of land that had a basis of $10,000,the basis of the land in Janelle's hands would be $10,000.

A partner's basis in his or her partnership interest (outside basis)is the sum of the money contributed plus the adjusted basis of property contributed.

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 basis of the land to Shelia assuming she has a $40,000 basis in her partnership interest?

Partnership income or loss and separately stated items are reported to the individual partners via Schedule K-1.

Paris,a 60% partner in Omega Partnership,has a basis of $25,000 in her partnership interest.Paris receives a cash distribution of $24,000 at year-end.What is Paris's basis in her partnership interest at the end of the year?

Doug,Geoffrey,and Fredrick form a partnership and contribute the following assets: FMV Basis Partnership \% Doug's inventory \ 45,000 \ 20,000 33.3\% Geoffrey's building. \ 175,000 \ 150,000 33.3\% Fredrick's acctrecv. \ 50,00 \ 0 33.3\% Geoffrey's building has a mortgage of $135,000 which the partnership assumes. a.Do any of the partners recognize any gain? If so,how much and why? b.What is each partner's basis in his or her partnership interest? c.What is the basis to the partnership in each asset? d.What are the holding periods to the partnership for each asset? e.How would your answer change with respect to Geoffrey if his basis in the building was $85,000?

Partner Jamie has a basis of $10,000 in a partnership at the beginning of the year.She receives $5,000 in cash distributions,her distributive share of income is $3,000,and she receives an equipment distribution with a basis of $6,000 (FMV $12,000).Jamie's basis in her partnership interest at the end of the year is:

If a personal-use asset is contributed to a partnership for business use,the partnership's basis in the asset is always the FMV of the asset.

A partner had the following items reported on a partnership Schedule K-1: Ordinary income (including Section 1245 recapture of \ 5,000 ) \5 9,000 Dividend income 1,500 Guaranteed payment 9,000 Section 179 expense 26,000 The partner's self-employment income for the year equals:

If a personal-use asset is contributed to a partnership for business use,the partnership's basis in the asset is always:

If Josh's partnership basis was $5,000 and he received a distribution of land that had a basis of $10,000,Josh would be required to recognize a $5,000 gain.

If only cash is contributed on the formation of a partnership,outside basis will equal inside basis.

Rich is a partner in RKW partnership.Rich owned 50% through January 1,2017 through April 30,2017,when he bought Kevin's 25% interest.He owned 75% for the rest of the year (assume a 365-day year).The partnership had ordinary income of $150,000 and $25,000 in long-term capital gains.Barring any special allocations in a partnership agreement,Rich's share of the income items is (round the answers up to the nearest whole dollar):

As a general rule,a distribution to a partner from a partnership is treated as:

When a partner is released of a partnership liability,the partner is treated as receiving a money distribution,which reduces his or her partnership basis.

Charley is a partner in Charley,Austin,Liz & Bass Partnership.Charley owned 25% from January 1,2017 to April 1,2017 when he bought both Liz's 25% and Bass's 25% interests.He owned 75% for the rest of the year.The partnership had ordinary income of $358,000 and $12,000 in long-term capital gains.Barring any special allocations in a partnership agreement,what is Charley's share of income (assume a 365-day year)?