Compute the total ordinary income for peacn inc

Assignment Help Taxation
Reference no: EM13708348

Problem 1:

FACTS

Isabel purchases a 10% interest in Delta LP (a Limited Partnership) interest (taxed as a tax partnership) for $1 Million at the beginning of 2014.

Delta LP had $5 Million debt at the beginning of 2014 and $7 Million at year end 2014.

Delta LP reported $2 Million Taxable Income for 2014 and Isabel received a 10% distributive share of the income.

Delta LP did not make any distributions to partners in 2014.

Delta LP requested partners contribute additional funds for expansion needs. Total contributions for Delta LP partners is $5 Million and Delta contributed 10%.

QUESTION

Compute the year end 2014 tax basis Isabel has in Delta LP.

Problem 2:

FACTS

Marty, Nigel, and Advance Technology LP form a legal LLC (called Variant LLC) and default to tax partnership for tax purposes.

Marty contributes a patent with $2 Million FMV and $100,000 tax cost to her.

Nigel contributes other intellectual property (IP) with a $5 Million FMV and $800,000 tax cost to him. The IP has a $1 Million loan attached that also gets contributed to the tax partnership.

AdvanceTech LP contributes $2 Million cash to the tax partnership that has a $2 Million tax cost (as cash's tax cost always equals FMV).

Marty has a 25% interest, Niguel has a 50% interest, and AdvanceTech LP has a 25% interest in the tax partnership (interest here for all is defined as an interest in capital and profits).

Question

You are to compute a FMV and tax cost balance sheets for Variant LLC at formation date using the above information.

The balance sheet one requires a listing of assets, debt and capital accounts for each tax partner at FMV.

The balance sheet two requires a listing of assets, debt and capital account for each tax partner at tax cost.

Or, you can do one balance sheet and place the FMV accounts and Tax cost accounts in separate columns.

Problem 3:

FACTS

Once you compute the tax cost balance sheet in #3, you can solve this problem. As, you use the same fact situation from #2.

Question

Below, you can compute the adjsuted tax cost (basis) of Niguel's interest in the tax partnership.

Problem 4:

FACTS

Pecan Inc. (operating as a tax S corporation) is in its first year of operations. We are now at the end of the year.

Pecan Inc. has two shareholders:

The corporation received $1,000,000 total from the shareholders for their shares. Thus, the shareholders paid $1,000 cash per share.

Peacn Inc. has the following transactions for the year.

Revenues $1,000,000
Salary Expense $125,000
Technology Lease Expense $350,000
Consulting Fees Expense $75,000
Net Short Term Capital Gain $100,000
Charitable Contribution $25,000
Total Cash Distributions to
Shareholders $80,000

Questions

Compute the total ordinary income for Peacn Inc.

Compute the separately stated items for Pecan Inc.

Compute Monica's share of the ordinary income

Compute Monica's share of the separately state items

Compute Monica's year end tax cost (basis) in her shares

Reference no: EM13708348

How much tax do you owe on the interest payment

You purchase a 6 percent $ 10,000 bond for $ 9,180 plus $ 156 in accrued interest for a total outlay of $ 9,336. Subsequently you receive a $ 300 interest payment. You are

What amount of revenue must dustin recognize in year zero

What amount of revenue must Dustin recognize in year 0 if Dustin uses the accrual method and Dado remits payment for the services in January of year 1? What amount can Dado

Please write a discussion of the topics: do income tax rate

Please write a discussion of the topics: Do income tax rate reductions (tax cuts) decrease or increase income tax revenues over time? Does raising income tax rates, in

Determine a corporations taxable income

Determine a corporations taxable income if it has $450,000 of gross receipts, $145,000 cost of goods sold, $276,000 of deductible business expenses, $20,000 of gain on the s

Identify two factors that increase audit risk

HI6026 Audit, Assurance and Compliance ASSIGNMENT. For each of the following items in Forest Ltd's financial report, identify two (2) factors in the information provided tha

Advise jools of its legal rights and remedies

Advise Jools of its legal rights and remedies, if any. In your answer discuss any legal points that Ming may argue. You may assume that Jools has satisfactorily performed all

How much would you need to earn in salary

Given that historical inflation rates have averaged 4% over the past 50 years, how much would you need to earn in salary 25 years from now to equal the 75K that you currently

What income tax consequences ensue from tim suggest approach

What income tax consequences ensue from Tim's suggested approach? Compare this result with what would happen if Tim merely transferred the Moore farm in return for stock in

Reviews

Write a Review

 
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd