Exam 10: Partnership Taxation

Please answer the following questions: a.What form is used to report income and expenses from a partnership? b.If a partner's basis at the beginning of the year is $1,000 and the partnership allocates $7,000 of loss to the partner: how much of the loss is deductible in the current year;what is his new basis in the partnership;and what happens to any excess loss not deducted? c.What is the exemption amount for a partnership?

Sabrina contributes a building with an adjusted basis of $80,000 to a partnership.The fair market value of the building is $100,000 on the date of the contribution.What is Sabrina's basis in her partnership interest immediately after the contribution?

A partnership will terminate and its tax year will close if the partnership ceases to carry on any business activity.

The "at-risk" rule does not apply to activities involving real estate.

If a partner has a more than 50 percent interest in a partnership,a capital gain resulting from the sale of property to the partnership will be taxed as ordinary income to the partner,provided the property is not a capital asset to the partnership.

On July 1 of the current year,Bertram acquired a 25 percent interest in Sycamore Company,a partnership,by contributing property with an adjusted basis of $7,000 and a fair market value of $12,000.The property was subject to a mortgage of $8,000,which was assumed by Sycamore Company.What is Bertram's basis in his partnership interest in Sycamore Company immediately after the partnership contribution?

Assuming that a partnership normally has a calendar year-end,what should the tax year-end be in the following independent cases? ​ a.Jim,a 70 percent partner,sells his partnership interest to Fred on August 10. b.On July 13,the partnership sells its office building and moves its business across town. c.June buys a 15 percent interest in the partnership on May 14. d.The partnership goes out of business on February 26.

Nash and Ford are partners who share profits and losses equally.For the current tax year,the partnership had book income of $70,000 which included the following deductions: What amount should be reported as ordinary income on the partnership return for the current tax year? ​

An equal partnership is formed by Rita and Gerry.Rita contributes cash of $10,000 and a building with a fair market value of $150,000,adjusted basis of $55,000,and subject to a liability of $60,000.Gerry contributes cash of $100,000.What amount of gain must Rita recognize as a result of this transaction?

A partner's interest in a partnership is decreased by:

Jerry receives cash of $15,000 and a building with a fair market value of $50,000 (adjusted basis of $30,000)in a current distribution. a.Assuming his basis in his partnership interest was $50,000,what amount of gain must Jerry recognize as a result of the current distribution? b.Assuming his basis in his partnership interest was $10,000,what amount of gain must Jerry recognize as a result of the current distribution?

Which of the following statements about partnerships is true?

The "at-risk" rule acts to prevent tax shelters from generating large losses for their investors while exposing them to little personal risk.

At the beginning of the year,Joe's basis in his partnership interest was $5,000.During the year,Joe contributed $10,000 in cash to the partnership and signed a bank loan to be personally liable for the partnership's debt of $25,000.For the current year,the partnership allocated a loss of $60,000 to Joe.In the following year,Joe's portion of the partnership income is $30,000.Which of the following is accurate?

Leslie contributes a building worth $88,000,with an adjusted basis of $40,000,to a partnership in exchange for a 50 percent interest in the partnership's capital and profits.What is the amount of Leslie's basis in her partnership interest immediately after the contribution?

A partnership may deduct a single personal exemption in calculating ordinary taxable income or loss.

A distribution of cash to a partner was greater than his basis in the partnership.How would this distribution be treated by the partner,assuming the distribution is not a liquidating distribution?

Kitty is a 60 percent partner of Tabby Associates.Kitty sells a building to the partnership for $75,000.If the building had an adjusted basis to Kitty of $95,000,how much gain or loss does Kitty recognize on this transaction?

Cooke and Thatcher form the C&T Partnership.Cooke contributes equipment with a fair market value of $70,000 and a basis of $35,000,in exchange for an 70 percent interest in the partnership capital and profits.Thatcher performs services worth $30,000 for the partnership in exchange for a 30 percent interest in capital and profits. a.What is the amount of Cooke's recognized gain or loss (if any)as a result of the contribution to the partnership in exchange for the partnership interest? b.What is Cooke's basis in his partnership interest immediately after the contribution? c.What is the amount of Thatcher's recognized income or loss (if any)on the contribution to the partnership? d.What is Thatcher's basis in her partnership interest immediately after the contribution? e.What is C&T Partnership's basis in the equipment received from Cooke?

Which of the following is true about an LLC (Limited Liability Company)?