Exam 14: Partnership Taxation

Latesha contributes a building with a FMV of $125,000 and a basis of $115,000 to a partnership on January 4,2011.On December 15,2014,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?

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?

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?

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

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

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.

Rich is a partner in RKW partnership.Rich owned 50% from January 1,2014 to April 30,2014,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:

A guaranteed payment is treated as:

If a partner contributes services on the formation of a partnership,how much income does the service partner recognize,if any?

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

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?

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.

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

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.

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?

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?

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?

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 her partnership interest at the end of the year?

Nondeductible partnership items do not decrease a partner's basis in the partnership interest.

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?