Clint noticed that the Schedule K-1 he just received from ABC Partnership included a $19,100 ordinary business loss allocation. His tax basis in ABC at the beginning of ABC's most recent tax year was $9,100. Comparing the Schedule K-1 he recently received from ABC with the Schedule K-1 he received from ABC last year, Clint noted that his share of ABC partnership debt changed as follows: recourse debt increased from $0 to $1,100, qualified nonrecourse debt increased from $0 to $2,100, and nonrecourse debt increased from $0 to $2,100. Finally, the Schedule K-1 Clint recently received from ABC reflected a $100 cash contribution he made to ABC during the year. Clint is not a material participant in ABC Partnership, and he received $9,100 of passive income from another investment during the same year he received the loss allocation from ABC. How much of the $19,100 loss from ABC can Clint deduct currently, and how much of the loss is suspended because of the tax basis, at-risk, and passive activity loss limitations?

Clint noticed that the Schedule K-1 he just received from ABC Partnership included a $19,100 ordinary business loss allocation. His tax basis in ABC at the beginning of ABC's most recent tax year was $9,100. Comparing the Schedule K-1 he recently received from ABC with the Schedule K-1 he received from ABC last year, Clint noted that his share of ABC partnership debt changed as follows: recourse debt increased from $0 to $1,100, qualified nonrecourse debt increased from $0 to $2,100, and nonrecourse debt increased from $0 to $2,100. Finally, the Schedule K-1 Clint recently received from ABC reflected a $100 cash contribution he made to ABC during the year. Clint is not a material participant in ABC Partnership, and he received $9,100 of passive income from another investment during the same year he received the loss allocation from ABC. How much of the $19,100 loss from ABC can Clint deduct currently, and how much of the loss is suspended because of the tax basis, at-risk, and passive activity loss limitations?

SWFT Corp Partner Estates Trusts

42nd Edition

ISBN:9780357161548

Author:Raabe

Publisher:Raabe

Chapter10: Partnerships: Formation, Operation, And Basis

Section: Chapter Questions

Problem 7BCRQ

See similar textbooks

Similar questions

Juan Diego began the year with a tax basis in his partnership interest of $53,800. During the year, he was allocated $21,520 of partnership ordinary business income, $75,320 of §1231 losses, and $32,280 of short-term capital losses and received a cash distribution of $53,800. Note: Do not round intermediate calculations. a. What items related to these allocations does Juan Diego actually report on his tax return for the year? [Hint: See Regulations §1.704-1(d)(2) and Revenue Rule 66-94.] b. If any deductions or losses are limited, what are the carryover amounts, and what is their character? [Hint: See Regulations §1.704-1(d).]
Juan Diego began the year with a tax basis in his partnership interest of $53,600. During the year, he was allocated $21,440 of partnership ordinary business income, $75,040 of §1231 losses, and $32,160 of short-term capital losses and received a cash distribution of $53,600. a. What items related to these allocations does Juan Diego actually report on his tax return for the year? [Hint: See Regulations §1.704-1(d)(2) and Revenue Rule 66-94.]
Mustafa's tax basis in his partnership interest at the beginning of the year was $29,000. If his share of the partnership liabilities increased by $12,500 during the year and his share of partnership income for the year is $5,800, what is his tax basis in his partnership interest at the end of the year? = Tax basis
At the beginning of the tax year, Melodie's basis in the MIP LLC was $64,000, including her $41,600 share of the LLC's liabilities. At the end of the year, MIP distributed to Melodie cash of $9,600 and inventory (basis of $7,680, fair market value of $9,600). In addition, MIP repaid all of its liabilities by the end of the year. a. If this is a proportionate current distribution, what is the tax effect of the distribution to Melodie and MIP? After the distribution, what is Melodie's basis in the inventory and in her MIP interest? If this is a proportionate current distribution, the cash distribution plus relief of liabilities Melodie's basis to After the distribution of inventory, what is Melodie's basis in the inventory and in her MIP interest? Basis in inventory Basis in MIP b. Would your answers to part (a) change if this had been a proportionate liquidating distribution? If this had been a proportionate liquidating distribution, then Melodie would have recognized a of $ and her…
At the beginning of the tax year, Melodie's basis in the MIP LLC was $76,000, including her $49,400 share of the LLC's liabilities. At the end of the year, MIP distributed to Melodie cash of $11,400 and inventory (basis of $9,120, fair market value of $11,400). In addition, MIP repaid all of its liabilities by the end of the year. a. If this is a proportionate current distribution, what is the tax effect of the distribution to Melodie and MIP? After the distribution, what is Melodie's basis in the inventory and in her MIP interest? If this is a proportionate current distribution, the cash distribution plus relief of liabilities Melodie's basis to $fill in the blank b After the distribution of inventory, what is Melodie's basis in the inventory and in her MIP interest? Basis in inventory $f Basis in MIP $ b. Would your answers to part (a) change if this had been a proportionate liquidating distribution? If this had been a proportionate liquidating distribution, then Melodie…
Mr. and Mrs. Poe earned $115,900 compensation income and $963 interest this year and recognized a $600 short-term capital gain and a $7,200 long-term capital gain on the sale of securities. They incurred $4,400 investment interest expense and $25,500 other itemized deductions. Use Individual tax rate schedules and Tax rates for capital gains and qualified dividends. Compute the Poe’s income tax on a joint return if they don’t elect to treat long-term capital gain as investment income. Compute the Poe’s income tax if they elect to treat enough long-term capital gain as investment income to allow them to deduct their investment interest.
At the beginning of the year, Kanye contributed a piece of land (FMV = $300,000; AB = $200,000) in exchange for a 50% capital and profit (and loss) interest in KW Partnership. KW reported the following income and expenses for the current tax year: Sales revenue: $700,000 1231 gain: $60,000 Long-term capital loss: $10,000 Qualified dividends: $10,000 W-2 wages paid to employees: $200,000 Utilities: $140,000 Rent: $180,000 No distributions were made this year. What is Kanye’s 704(b) book capital account balance at the end of the tax year?
At the beginning of the tax year, Melodie's basis in the MIP LLC was $70,000, including her $45,500 share of the LLC's liabilities. At the end of the year, MIP distributed to Melodie cash of $10,500 and inventory (basis of $8,400, fair market value of $10,500). In addition, MIP repaid all of its liabilities by the end of the year. Question Content Area a. If this is a proportionate current distribution, what is the tax effect of the distribution to Melodie and MIP? After the distribution, what is Melodie's basis in the inventory and in her MIP interest? If this is a proportionate current distribution, the cash distribution plus relief of liabilities increases or decreases? Melodie's basis to $ After the distribution of inventory, what is Melodie's basis in the inventory and in her MIP interest? Basis in inventory $ Basis in MIP $ Question Content Area b. Would your answers to part (a) change if this had been a proportionate liquidating distribution?…
During the current year, Eleanor Shellstrop, a married individual who files a joint return, reports the following items of income and loss: Salary 125,000 Income from Activity A Loss from Activity B (55,000) Loss from Activity C (25,000) Loss from Activity D (15,000) Activities A, B, C and D are all classified as Active Rental Real Estate passive activities. 1. What is Eleanor's AGI for the year? Salary Deductible PAL AGI 2. What is the amount of suspended losses (if any) that may be carried over with respect to each activity? Activity Bi Activity C 50,000 Activity D
At the beginning of the tax year, Melodie’s basis in the MIP LLC was $60,000, including her $40,000 share of the LLC’s liabilities. At the end of the year, MIP distributed to Melodie cash of $10,000 and inventory (basis of $6,000, fair market value of $10,000). In addition, MIP repaid all of its liabilities by the end of the year. a. If this is a proportionate current distribution, what is the tax effect of the dis- tribution to Melodie and MIP? After the distribution, what is Melodie’s basis in the inventory and in her MIP interest?
Anisa owns a rental house that generated a ($11,000) loss this year. Anisa does not meet thestandards for material participation but does meet the standards for active participation. Anisahas a salary of $70,000 and $4,000 in dividend income. How is the ($11,000) rental real estateloss treated on Anisa’s current year tax return?a. The full ($11,000) loss is deductible.b. Anisa can deduct only ($4,000) of the loss, to offset her dividend income .c. The rental loss is not deductible this year because Anisa does not have any passiveincome.d. The rental loss is not deductible this year because Anisa’s income is too high
K is the president and chief executive officer of KL, Inc., an S corporation that is owned equally byindividuals K and L. K receives a salary of $83,000, and her share of the net income, after deductingexecutive salaries, is $50,000. What is the proper income tax and payroll tax (F.I.C.A. or self‐employmenttax) treatment of each of the following to K for the current calendar year?a. The salaryb. The net income of $50,000.c. Calculate the payroll tax for K