Exam 14: Partnership Taxation

Doug,Geoffrey,and Fredrick form a partnership and contribute the following assets: 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?

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

Calvin purchased a 30% partnership interest for $53,000 in March 2012.Calvin's share of partnership income was $5,000 in 2012,$25,000 in 2013,and $(9,000)in 2014.Calvin made no additional contributions to,or withdrawals from,the partnership.On December 1,2014,Calvin sold his partnership interest for $83,000.What is Calvin's gain or loss on the disposal?

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

Rita has a beginning basis in a partnership of $43,000.Rita's share of income and expense from the partnership consists of the following amounts: a.What items are separately stated? b.What is Rita's self-employment income? c.Calculate Rita's partnership basis at the end of the year.

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.

Raul contributes the following assets to a partnership for a 50% interest: What is Raul's basis in his partnership interest?

Ordinary income includes interest income and dividend income received by the partnership.

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?

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

Jose purchased a 30% partnership interest for $38,000 in June 2011.Jose's share of partnership income was $8,000 in 2011,$12,000 in 2012,$28,000 in 2013,and $6,000 in 2014.Jose made no additional contributions to,or withdrawals from,the partnership.On December 29,2014,Jose sold his partnership interest for $108,000.What is Jose's gain or loss on the sale of his partnership interest?

In 2013,Angel contributes land to a partnership with a basis of $12,000 and a FMV of $22,000.In 2014,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?

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

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.

Liquidation occurs when a partner's entire interest is redeemed by the partnership.

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:

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

Upon the sale of a partnership interest,a partner must recognize ordinary income if the partnership has substantially appreciated inventory or unrealized receivables.

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:

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