Question

In: Accounting

A and B form the equal AB partnership. A contributes property (FMV = $200,000, basis =...

A and B form the equal AB partnership. A contributes property (FMV = $200,000, basis = $100,000) and B contributes $200,000 cash. The property is depreciated straight line over a 10 year life for both book and tax purposes. The partnership also has other property (FMV = $280,000, basis = $280,000) that is depreciated straight line over 10 years.

(1) Under Code Sec. 704(c), how much of the tax depreciation of the contributed property by A in the first year will B get?

(2) Assuming a curative allocation is made, how much will it be?

(3) If there were no other depreciable assets, what type of curative allocation could be made?

Please separate the answer.

Solutions

Expert Solution

SOLUTION:-

A and B have thest ratio of 1:1

A will be located = 20,000

* A eill be located = 20,000

* B will be located = 20,000

Outer property

* A will be located = 28,000

= 14,000

* B will be located = 28,000

= 14,000

* Total of B will be = 10,000 + 14,000

= 24,000

THANK YOU, if any querise please leave your valuable comment on comment box.....

If possible then rate the answer as well.....

ekkarill92 answered 1 year ago

Next > < Previous

Related Solutions

Emma and Laine form the equal EL Partnership. Emma contributes cash of $100,000. Laine contributes property...

Emma and Laine form the equal EL Partnership. Emma contributes cash of $100,000. Laine contributes property with an adjusted basis of $40,000 and a fair market value of $100,000. If an amount is zero, enter "0". a. How much gain, if any, must Emma and Laine recognize on the contributions? Emma recognizes a gain of $_________ on the transfer and Laine recognizes a gain of $____________. b. Emma's tax basis in her partnership interest is $___________. Her § 704(b) book...

1.The equal XYZ Partnership has the following balance sheets: Basis FMV Property A $39,000 $54,000 Property...

1.The equal XYZ Partnership has the following balance sheets: Basis FMV Property A $39,000 $54,000 Property B $60,000 $42,000 Inventory A $3,000 $15,000 Inventory B $15,000 $12,000 $117,000 $123,000 Capital, X $35,000 $41,000 Capital, Y $41,000 $41,000 Capital, Z $41,000 $41,000 $117,000 $123,000 XYZ has a Code Section 754 election in effect, and X sells her interest to W for $41,000 cash. The two Properties are both capital assets. Inventory A was contributed by X at a time when its...

A, B and C form an equal partnership. A contributes accounts receivable for services rendered (A.B.--...

A, B and C form an equal partnership. A contributes accounts receivable for services rendered (A.B.-- $0, F.M.V.-- $10,000); B, a real estate dealer, contributes lots held primarily for sale (A.B. -- $5,000, F.M.V. -- $10,000); and C, an investor, contributes land (A.B. -- $20,000, F.M.V. -- $10,000). Unless otherwise stated, the partnership is not a dealer in receivables or lad, all contributed assets have been held long-term by the partners prior to contribution, and the traditional method of allocation...

Sybil transfers land (FMV = $200,000, basis = $120,000 to the Eve Partnership, in which she...

Sybil transfers land (FMV = $200,000, basis = $120,000 to the Eve Partnership, in which she is a 1/3 partner. Twenty months later the partnership distributes property (FMV = $150,000, basis = $50,000) to Sybil, and her basis in her partnership interest immediately before the distribution (and before the addition of any gain under Section 737) is $120,000 Which would this set of transactions be taxed under, Code Section 707 or 737? If, at the time of the contribution, it...

1 A and B form the AB partnership. According to the agreement, A contributed $70,000 in...

1 A and B form the AB partnership. According to the agreement, A contributed $70,000 in cash while B contributed $80,000. Make the journal entry to form the partnership under the following assumptions: a) The agreement was silent about allocating capital balances. b) The agreement specified that capital balances will be allocated equally and the bonus method will be used. c) The agreement specified that capital balances will be allocated equally and the goodwill method will be used. 2 Using...

Peter contributes property to a partnership in exchange for a 30% interest in the partnership. The...

Peter contributes property to a partnership in exchange for a 30% interest in the partnership. The contributed property consists of real estate he owns worth $500,000. Peter has an adjusted basis in the real estate of $200,000 and the real estate is subject to a mortgage of $300,000. What is Peter’s basis in his partnership interest, and how much gain or loss does he recognize? a. negative basis of $10,000, and no gain is recognized.b. 0 basis and gain of...

3. A receives a gift from B. B’s basis in the property was $200,000 and the...

3. A receives a gift from B. B’s basis in the property was $200,000 and the fair market value of the property was $500,000 on the date of the gift. B held the property for 5 years and incurred $25,000 of gift tax due to the gift. A week after A receives the property, A sells the property. What are the tax results to A if A sells the property for $510,000? $450,000? 4. Same facts as above except B...

A and B, both calendar year noncorporate taxpayers, are equal partners in the AB partnership, which...

A and B, both calendar year noncorporate taxpayers, are equal partners in the AB partnership, which had the following income and expenses during its (business purpose) taxable year that ended on July 31 of the current year: Gross receipts from inventory sales $100,000 Cost of goods sold $30,000 Salaries paid to nonpartners $10,000 Depreciation $12,000 Advertising expenses $8,000 Interest expense paid on investment margin account maintained by AB (see § 163(d)) $6,000 Gain from the sale of machine held for...

1. Sarah contributes a building with an adjusted basis of $80,000 to a partnership for a...

1. Sarah contributes a building with an adjusted basis of $80,000 to a partnership for a 10% interest in the partnership. The fair market value of the building is $100,000 on the date of the contribution. What is Sarah's basis in the partnership immediately after the contribution? a. $100,000 b. $8,000 c. $10,000 d. $80,000 2. Erin and Rebecca enter into a partnership to provide tutoring services. They are equal partners in the partnership. Erin contributes office furniture in the amount...

What issues arise if a partner contributes appreciated property to a partnership and other appreciated property...

What issues arise if a partner contributes appreciated property to a partnership and other appreciated property is distributed to that partner. For example, a partner has a $60,000 basis in the partnership interest just before receiving a parcel of land as a liquidating distribution, the partner will have no remaining precontribution gain and will receive no other distribution. What will be the partners basis in the land once it is distributed upon termination? Explain fully.

Subjects