Exam 14: Partnership Taxation

Partner Spence had the following items reported on a partnership Schedule K-1: Ordinary income \5 7,000 Interest income 4,900 Dividend income 5,300 Guaranteed payment 15,000 Section 179 expense 16,000 Cash distribution 20,000 Spence had a basis in his partnership interest of $23,000 at the beginning of the year.What is Spence's basis in his partnership interest at the end of the year?

Bryan,Shahin,and Michele form a partnership.Bryan and Shahin contribute inventory and a building,respectively.Michele agrees to perform all of the accounting and office work in exchange for a 10% interest. FMV Basis Partnership \% Bryan's inventory \ 300,000 \ 225,000 45\% Shahin's building \ 300,000 \ 125,000 45\% Michele's services \ 0 \0 10\% 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 of each asset?

On April 30 of the current year,Ashley contributes a building with a $155,000 basis and a $235,000 FMV in exchange for a partnership interest.She purchased the building eight years ago. a.What is Ashley's basis in her partnership interest? b.What is Ashley's holding period of her partnership interest? c.What is the basis of the building in the hands of the partnership? d.What is the holding period of the building in the hands of the partnership? e.How will the partnership depreciate the building in the year of contribution?

If Jake contributes land to a partnership with a basis of $12,000 and a FMV of $18,000,the partnership will have a basis in the asset of $12,000.

Typically,a partner does not recognize a gain when he or she receives a current distribution.

When a partner increases his or her share of the partnership's liabilities,the liability increase is treated as a:

Guaranteed payments are the only items that are reported both as a deduction for ordinary income and as a separately stated item.

When dealing with the liquidation of a partnership interest,a partner will:

Raul contributes the following assets to a partnership for a 50% interest: Raul's Basis FIMV Building \ 75,000 \ 125,00 Computer Equipment \ 72,000 \ 30,000 Total \ 100,000 \ 55,000 What is Raul's basis in his partnership interest?

If Casey's partnership basis is only $100,000 and Cherie's basis is $200,000,there is no way both Casey and Cherie can be equal partners at 50% each in the partnership.

Marty and Blake are equal partners in MB Partnership.The partnership reports the following items of income and expense: Ordinary income from operations \ 38,000 Interest income 7,500 Long-term capital gains 1,200 § 179 expense 35,000 Charitable contributions 5,000 a.Which items are considered separately stated items? How will these items be reported to the partners? What form will be used? b.Where (on what forms)will these separatley stated items amounts be reported by the partners?

Jeremy and Juan are equal partners in the JJ Partnership.Jeremy receives a guaranteed payment of $120,000.In addition to the guaranteed payment,Jeremy withdraws $30,000 from the partnership.The partnership has $78,000 in ordinary income during the year. a.How much income must Jeremy report from JJ partnership? b.What is the effect on Jeremy's partnership basis?

Which of the following is reported as a separately stated item from a partnership?

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 recognized gain or loss?

Cameron has a basis in his partnership interest of $5,000.Cameron's share of partnership income is $5,000.He also receives a cash distribution from the partnership of $13,000.What is his gain or loss as a result of the distribution?