Question
In: Accounting
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 is applied with respect to all contributed property. What tax result in the following alternative transactions:
(a) The partnership sells the receivables contributed by A for $10,000?
(b) The partnership sells the lots contributed by B for $10,600?
(c) The partnership sells the lots contributed by B for $9,100?
(d) Same as (c), above, except the partnership elects to use the remedial method of allocation.
(e) The partnership is a real estate dealer and sells the land contributed by C for $17,000?
(f) Same as (e), above, except the sale is for $7,000?
(g) Would the result in any of the above transactions change if all sales have occurred 6 years after the property was contributed?
Solutions
ekkarill92 answered 2 years agoRelated Solutions
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...
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...
A and B are equal partners in a personal services partnership. Each partner acquired her partnership...
A and B are equal partners in a personal services partnership.
Each partner acquired her partnership interest for cash several
years ago. None of the partnership’s asset sis Section 704(c)
property. The partnership has the following balances sheet:
Assets
Liabilities and Partnerships' Capital
A.B.
FMV
cash
13,000
13,000
Liabilities
2,000
capital
assets
Capital
A.B.
FMV
collectibles
1,000
3,000
A
10,000
15,000
Other
6,000
2,000
B
10,000
15,000
Subtotal
...
A and B are equal partners in a personal services partnership. Each partner acquired her partnership...
A and B are equal partners in a personal services partnership.
Each partner acquired her partnership interest for cash several
years ago. None of the partnership’s assets is Section 704(c)
property. The partnership has the following balance sheet:
Assets
Liabilities and Partners’ Capital
A.B.
F.M.V.
A.B.*
F.M.V.
Cash
$13,000
$12,000
Liabilities:
$2,000
Capital
Assets:
Capital:
Collectibles
1,000
3,000
A
$10,000
15,000
Other
6,000
2,000
B
10,000
15,000
Subtotal
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5,000
Receivables
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14,000 ...
a. Performed $23,600 of services on account. b. Collected $21,200 cash on accounts receivable. c. Paid...
a.
Performed $23,600 of services on
account.
b.
Collected $21,200 cash on
accounts receivable.
c.
Paid $4,600 cash in advance for
an insurance policy.
d.
Paid $1,420 on accounts
payable.
e.
Recorded the adjusting entry to
recognize $3,700 of insurance expense.
f.
Recorded the adjusting entry to
recognize $340 accrued interest revenue.
g.
Received $5,300 cash for
services to be performed at a later date.
h.
Purchased land for $1,870
cash.
i.
Purchased supplies for $1,300 cash
Required
Record each...
Martin Electronics has an accounts receivable turnover equal to 13 times. If accounts receivable are equal...
Martin Electronics has an accounts receivable turnover equal to
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Round your answer to 2 decimal
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John and Bart decide to form a partnership. John invests $250,000 cash and accounts receivable of...
John and Bart decide to form a partnership. John invests
$250,000 cash and accounts receivable of $200,000 less allowance
for doubtful accounts of $20,000. Bart contributes $150,000 cash.
accounts receivable of $25,000 less allowance for doubtful account
of $3,000 , and equipment having a $60,000 book value. It is agreed
that the allowance account should be $25,000 for the accounts
receivable contributed by John, and $4,000 for the accounts
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Problem 21-28 (LO. 3, 8) Emma and Laine form the equal EL Partnership. Emma contributes cash...
Problem 21-28 (LO. 3, 8)
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...
A, B, and C each contribute $20,000 to form the ABC general partnership. The partnership agreement...
A, B, and C each contribute $20,000 to form the ABC general
partnership. The partnership agreement satisfies the primary test
for economic effect under Internal Revenue Code Section 704(b).
Partnership profits and losses are allocated 40% to A, 40% to B and
20% to C. The partnership uses its $60,000 cash and borrows an
additional $40,000 on a recourse basis and purchases land for
$100,000.
(a) How will the $40,000 liability be allocated and what will be
each partner’s outside...
103. Cox, North, and Lee form a partnership. Cox contributes $204,000, North contributes $170,000, and Lee...
103. Cox, North, and Lee form a partnership. Cox contributes
$204,000, North contributes $170,000, and Lee contributes $306,000.
Their partnership agreement calls for a 6% interest allowance on
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capital account?
103B. Farmer and Taylor formed a partnership with capital
contributions of $250,000 and $300,000, respectively. Their
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