Reference no: EM13925286
PARTNER'S OUTSIDE BASIS IN PARTNERSHIP INTEREST
Jack and Bill started the Scoop du Jour, LLC in 2014. The LLC is taxed as a partnership.Jack contributed property with $45,000 FMV and $37,000 basis. Bill contributed $45,000 cash.They each own 50% and share profits and losses 50/50.The activity for the partnership in 2014 is as follows:
Ordinary loss 45,450
Rental income 7,500
Charitable contributions 2,000
Other separately-stated expenses 7,600
Cash distribution to Bill 35,000
The business acquired equipment and machinery. This property was financed witha loan from Jack for 17,000 and 25,000 line of credit from the bank. The debt balancesdid not change all year. The line of credit is nonrecourse debt (for at-risk loss limitation).Hint: liabilities are allocated based on the ownership percentage, generally. However,if the debt is from a partner or a partner personally guarantees the debt, it is allocated tohim 100%.At the beginning of 2015 Jack sold his partnership interest to Ann for $50,000. Jack's loanwas also repaid.
Required:
1 Prepare each partner's outside basis in their respective partnership interest as of 12/31/14.
2 Calculate Jack's gain or loss on the sale of his partnership interest. The character of the gainor loss is not required.
3 Answer the following questions:a) Was there a gain or loss on Jack's contribution of the property? If so, how much?b) Were there distributions in excess of basis? If so, how much?c) Are there any suspended losses due to basis limitations? Who and how much?
4 Are there suspended losses due to at-risk limitations? Who and how much?
|
Prepare a structured report on the investigation
: You are required to prepare a structured report on the investigation of two distinctive job roles in the IT sector available to you within 5 years of graduation.
|
|
How does this change your overall return on investment
: Suppose you invest $10,000 in a savings account earning 2% interest (compounded yearly) with no risk. After 7 years, how much will you have? but this time there is an inflation rate of 4%. How does this change your overall return on investment?
|
|
Research on existing or emerging it-related technology
: Individual research on existing or emerging IT-related technology and related ethical issues
|
|
Grenfell company
: Grenfell Company is preparing a cash budget for 2014 for purchases of Calvos.
|
|
Calculate jack gain or loss on the sale of his partnership
: 1 Prepare each partner's outside basis in their respective partnership interest as of 12/31/14. 2 Calculate Jack's gain or loss on the sale of his partnership interest. The character of the gainor loss is not required.
|
|
What is the annualized risk free rate
: You have run a regression of returns of lulus, against the S&P 500 Index using monthly returns over the last 5 years and arrived at the following regression: R lulus = -.20%+1.5R S&P500. If the stock had a Jensen’s alpha of +0.10% (on a monthly basis..
|
|
What is the market value of the stock after rights offering
: Suppose you own 40,000 shares of common stock in a firm with 2 million total shares outstanding. The firm announces a plan to sell an additional 0.6 million shares through a rights offering. What is the market value of the stock after the rights offe..
|
|
Communicate is growing and expanding
: Unit II Scholarly ActivityDigital FootprintsStudents will choose ONE of these four scenarios to complete a paper at least 500 words in length.Scenarios: Choose ONLY ONE.Scenario 1: According to the textbook, the means by which we communicate is growi..
|
|
Quarter operations
: The company's accountant is preparing the purchases budget for the first quarter operations. Metro maintains ending inventory at 20%
|