Exam 10: Special Partnership Issues

The XYZ Partnership owns the following assets on December 31: A partner has a 20% interest with a basis of $6,000 in XYZ before receiving a liquidating distribution of $10,000 cash.XYZ Partnership has no liabilities.His recognized gain is

All states have adopted laws providing for limited liability companies.Describe a limited liability company (LLC).

Brown Company recently has been formed as a limited liability company (LLC).Brown Company is owned equally by three individuals-Gene,Susan,and Sandra-all of whom have substantial income from other sources.Brown is a manufacturing firm and expects to earn approximately $130,000 of ordinary income and $30,000 of long-term capital gain each year for the next several years.Gene will be a full-time manager and will receive a salary of $60,000 each year.What tax issues should the owners consider regarding the LLC's initial year of operations?

The AB,BC,and CD Partnerships merge into the ABCD Partnership.AB (owned by Austin and Ben)contributes assets worth $100,000.BC (owned by Ben and Charlie)contributes assets worth $200,000.CD (owned by Charlie and Dennis)contributes assets worth $300,000.The capital and profits interest in ABCD is owned by: Austin,10%;Ben,30%;Charlie,25%;and Dennis,35%.ABCD Partnership is a continuation of

On November 30,Teri received a current distribution of cash of $4,000,marketable securities with a basis of $24,000 and an FMV of $30,000,and inventory with a basis of $2,000 and an FMV of $6,000.Prior to the distribution,Teri's basis in her interest in the partnership was $30,000.(There is no Sec.751 exchange as a result of the distribution. )How much gain (if any)must Teri recognize as a result of the distribution?

Patrick purchases a one-third interest in the PPP partnership for $600,000.The partnership has assets with a value of $1,500,000.PPP has a 754 election in effect.What is the amount of the basis adjustment?

Tenika has a $10,000 basis in her interest in the TF Partnership and no remaining precontribution gain immediately before receiving a current distribution that consisted of $4,000 in money,plastic tubes held in inventory with a $3,000 basis to the partnership and an FMV of $3,375,and drip irrigation pipe held as inventory with a $6,000 basis to the partnership and an FMV of $5,000.What is the basis in Tenika's hands of the distributed property?