Exam 14: Partnership Taxation

Callie contributes the following assets to a partnership in exchange for a 30% partnership interest: What is Callie's beginning basis in her partnership interest?

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

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.

Marty and Blake are equal partners in MB Partnership. The partnership reports the following items of income and expense: 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 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?

Guaranteed payments are always determined with regard to partnership income.

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.

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.

Jose purchased a 30% partnership interest for $38,000 in June 2012. Jose's share of partnership income was $8,000 in 2012, $12,000 in 2013, $28,000 in 2014, and $6,000 in 2015. Jose made no additional contributions to, or withdrawals from, the partnership. On December 29, 2015, Jose sold his partnership interest for $108,000. What is Jose's gain or loss on the sale of his partnership interest?

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

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.

A partner's share of recourse liabilities increases the partner's basis in his or her partnership interest.

A guaranteed payment is treated as:

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

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?

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

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. 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?

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

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?

A pre-contribution gain occurs when a partner contributes appreciated property to a partnership and, within seven years, the partnership distributes the same property to another partner.