23 Jun Identify which of the following statements is tr
Identify which of the following statements is true.
A contribution of services for a partnership interest is a tax-free transaction
For federal income tax purposes, formation of a partnership is governed by Sec. 721.
When a partnership assumes a liability on property contributed by a partner, the only
effect on the contributing partners basis in his or her partnership interest is that his or her
basis will be increased by the amount of the liability assumed by the other partners
d) All the above are false.
4) When determining the guaranteed payment, which of the following is correct?
A) If the distributed share is less that the guaranteed minimum amount, the guaranteed
payment is equal to the difference between the distributive share and the guaranteed
minimum amount.
B) If the distributive share is greater than the guaranteed minimum amount, the guaranteed
payment is equal to the difference between the distributive share and the guaranteed
payment amount.
C) Guaranteed payments are payments determined with regard to partnership income.
D) The distinction between guaranteed payments and the distributive share is clear in
practice.
5) Identify which of the following statements is true.
A) A partners relief of debt is treated as if the partner receives a cash distribution.
B) When a partnership assumes any liabilities of the transferor, the transferor has an
increase in the basis of his or her partnership interest.
C) Gain recognized by a contributing partner because of the assumptions of liabilities by
the partnership increases the partnership basis in the contributed property.
D) All of the above are false.
6) Jane contributes land with a FMV of $100,000 and a basis of $40,000 to the Green
Partnership in exchange for a 25% partnership interest. The partnership assumes the
$80,000 mortgage on the land. Mary has a 25% share of partnership liabilities. The
Green Partnership has $8,000 in liabilities immediately before Janes contribution.
How much income does Jane recognize on the contribution?
What is Janes basis in her partnership interest?
7) The WE partnership reports the following items for its current tax year.
Item
Income
Operating income
$90,000
Rental Income
$15,000
Interest income
Tax Exempt municipal bonds
$2,000
Corporate Bonds
$4,000
Sec. 1231 gain
$20,000
Sec. 1245 gain
$18,000
Long Term Capital Gain
$7,000
Expenses
Rental Expenses
$12,000
Salaries paid to employees (not partners) $30,000
Charitable Contributions
$5,000
Interest paid relating to borrowings used
To finance municipal bonds
$3,000
Our website has a team of professional writers who can help you write any of your homework. They will write your papers from scratch. We also have a team of editors just to make sure all papers are of HIGH QUALITY & PLAGIARISM FREE. To make an Order you only need to click Ask A Question and we will direct you to our Order Page at WriteDemy. Then fill Our Order Form with all your assignment instructions. Select your deadline and pay for your paper. You will get it few hours before your set deadline.
Fill in all the assignment paper details that are required in the order form with the standard information being the page count, deadline, academic level and type of paper. It is advisable to have this information at hand so that you can quickly fill in the necessary information needed in the form for the essay writer to be immediately assigned to your writing project. Make payment for the custom essay order to enable us to assign a suitable writer to your order. Payments are made through Paypal on a secured billing page. Finally, sit back and relax.
About Writedemy
We are a professional paper writing website. If you have searched a question and bumped into our website just know you are in the right place to get help in your coursework. We offer HIGH QUALITY & PLAGIARISM FREE Papers.
How It Works
To make an Order you only need to click on “Order Now” and we will direct you to our Order Page. Fill Our Order Form with all your assignment instructions. Select your deadline and pay for your paper. You will get it few hours before your set deadline.
Are there Discounts?
All new clients are eligible for 20% off in their first Order. Our payment method is safe and secure.