{"id":75781,"date":"2018-02-20T23:50:30","date_gmt":"2018-02-20T23:50:30","guid":{"rendered":"https:\/\/writemyessayfree.com\/advanced-tax-questions-problem"},"modified":"2017-08-18T07:03:46","modified_gmt":"2017-08-18T07:03:46","slug":"advanced-tax-questions-problem","status":"publish","type":"post","link":"https:\/\/www.benedictsol.com\/blogs\/advanced-tax-questions-problem\/","title":{"rendered":"Advanced Tax Questions Problem"},"content":{"rendered":"
\n 1) Yong contributes a machine having an adjusted basis of $20000 and a FMV of $25000
\n
for a 10% partnership interest. Yong had taken $10000 of depreciation prior to the
\n
contribution. The partnership has no liabilities. As a result of the contribution, Yong
\n
must recognize:
\n
A) No gain or loss
\n
B) A $5000 sec. 1245 gain
\n
C) A $5000 capital gain
\n
D) $10,000 ordinary income
\n
2) Identify which of the following statements is true.
\n
a) The contribution of Sec. 1245 property to a partnership triggers a recognition of ordinary
\n
income by the contributor at the time of the transfer.
\n
b) A partner may not recognized ordinary income when receiving a capital and profits
\n
interest in a partnership in exchange for services.
\n
c) When a partnership interest is given to a partner in exchange for services , the partnership
\n
can deduct or capitalize the FMV of the services, depending on the nature of the services.
\n
d) All of the above are false.
\n
3)
\n
a)
\n
b)
\n
c)<\/p>\n

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.<\/p>\n

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
What is the WE partnerships ordinary income for the current year?
8)<\/p>\n

Janice has a 30% interest in the Jansen Partnership. She is to receive a guaranteed
payment for deductible services of $50,000. The partnership reports $30,000 of ordinary
income and a $100,000 long- term capital gain before deducting the guaranteed
partnership.
A) What is her income from the partnership?
B) What is her basis in her partnership basis at year-end?
9) Jerry has a 10% interest in the EKG partnership capital, profits, and losses. He is a
limited partner. At the beginning of the current year, his basis in his partnership interest
is $10,000. The partnership earned $20,000 of ordinary income this year and repaid
$150,000 liability.
A) Is the repayment of the liability a taxable event for Jerry? If so, what are the amount
and character of the income reported?<\/p>\n<\/fieldset>\n

<\/i><\/p>\n","protected":false},"excerpt":{"rendered":"

1) Yong contributes a machine having an adjusted basis of $20000 and a FMV of $25000 for a 10% partnership interest. Yong had taken $10000 of depreciation prior to the contribution. The partnership has no liabilities. As a result of Read More …<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-75781","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts\/75781","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/comments?post=75781"}],"version-history":[{"count":0,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts\/75781\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/media?parent=75781"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/categories?post=75781"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/tags?post=75781"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}