Al (60%) & Bob (40%) are partners in ALBOB Partnership, and Al has an outside basis of $1,000,000 and a capital account balance of $1,000,000 prior to the distribution. ALBOB distributes inventory ($110,000 FMV, $10,000 inside basis) to Al in a disproportionate current distribution. 1. What is the amount of gain (ordinary income gain) recognized by Bob? 2. What is Al's basis in the inventory he received?

Al (60%) & Bob (40%) are partners in ALBOB Partnership, and Al has an outside basis of $1,000,000 and a capital account balance of $1,000,000 prior to the distribution. ALBOB distributes inventory ($110,000 FMV, $10,000 inside basis) to Al in a disproportionate current distribution. 1. What is the amount of gain (ordinary income gain) recognized by Bob? 2. What is Al's basis in the inventory he received?

SWFT Individual Income Taxes

43rd Edition

ISBN:9780357391365

Author:YOUNG

Publisher:YOUNG

Chapter20: Corporations And Parterships

Section: Chapter Questions

Problem 47P

See similar textbooks

Similar questions

ASSUMING GOCE & OLIVEROS PARTNERSHIP are partners IN TRADE. the 2020 financial records. SERVICE REVENUE 4,490,000; COST OF SERVICE 1,610,000; OPEX 800,000 THE PROFIT AND LOSS IS DISTRIBUTED 55% GOCE AND 45% OLIVEROS. GOCE IS ALSO ENGAGED IN BUSINESS WITH THE FOLLOWING DATA FOR THE YEAR GROSS SALES 2,500,000; COST OF SALES 1,250,000 AND OPEX 550,000. HOW MUCH IS THE INCOME TAX PAYABLE OF GOCE & OLIVEROS PARTNERSHIP? DISTRIBUTABLE SHARE OF OLIVEROS? FINAL TAX OF GOCE? FINAL TAX OF OLIVEROS? Use Philippine tax lax
Cyril and James formed a partnership on January 1, 20x1 by contributing P1,600,000 and P2,400,000, respectively. As of January 1, 20x2, their partnership capital was P1,800,000, and P2,200,000 respectively. Situations: A. No profit-sharing agreement B. No loss-sharing agreement C. Profit is divided equally D. Loss is divided 30:70, respectively Required: Compute the share of Cyril and James assuming: P800,000 profit Cyril P800,000 loss Cyril Situational Cases James James 1. A and B (1) (2) (3) (4) (5) (6) (7) (8) 2. B and C 3. A and D 4. C and D
Following are the capital account balances and profit and loss percentages (indicated parenthetically) for the William, Jennings, and Bryan partnership: William (45%) Jennings (458) Bryan (10%) Darrow invests $425,000 in cash for a 30 percent ownership interest. The money goes to the business. No goodwill or other revaluation is to be recorded. After the transaction, what is Jennings's capital balance? Multiple Choice $437,500 $310,000 $314,275 $360,000 310,000 290,000 $312,850
Required: 1. How much will Mira receive if the net income earned is P 155,000? * 2. Except that the company incurred net loss of P 9,200, compute for the share of each partner. *
Cyril and James formed a partnership on January 1, 20x1 by contributing P1,600,000 and P2,400,000,respectively. As of January 1, 20x2, their partnership capital was P1,800,000, and P2,200,000 respectively.Situations:A. No profit-sharing agreementB. No loss-sharing agreementC. Profit is divided equallyD. Loss is divided 30:70, respectivelyRequired: Compute the share of Cyril and James assuming:P800,000 profit P 4. C and D (
Maria Partnership had the following information for the year ending December 31, 2022: Gross Receipts (Sales)- $600,000; Cost Of Goods Sold- $320,000; Operating Expenses- $88,000; Charitable Contributions-$2,000; Section 1231 Gain-$1,600; Section 1245 Gain $900; Dividends - $800. Maria Partnership's Ordinary Income (ie. Nonseparately Stated Income) for the year of 2022 is: O $192,900. O $195,300. O $192,000. O $193,700.
Rosy, Roland and Robert were partners with capital balances as at year end of P250,000; P350,000; P400,000, respectively. The partner's agreement stated that profit sharing will be based on year-end capital balances. If the net income for the year before 30% income tax amounted P280,000, how much will be the profit share of Roland ?
Elisa Diaz and Ma. Concepcion Manalo formed a partnership, investing P330,000 and P110,000, respectively. Determine the partners' participation in the 2018 profit of P420,000 under each of the following independent assumptions: a. No areement concerning division of profit. B. Divided in the ratio of original capital investment. C. Interest at th rate of 8% allowed on original investments and the remainder divided in the ratio of 2:3 D. Salary allowances of P50,000 and P70,000, respectively, and the balance to be divided equally. E.Allowance of interest at the rate of 8% on original investments, salary allowances of P50,000 and P70,000, respectively, and the remainder to be divided equally.
REQUIRED You are required to divide the profit in each of the following situations: a)Profit is shared in the ratio Andy 60% and Brad 40% b) Profits are shared based on the initial capital ratio. c) Profits are shared based on closing balances of capital accounts d) Profits are shared equally between the partner
Required information [The following information applies to the questions displayed below.] This year, Darrel's distributive share from Alcove Partnership includes $7,000 of interest income, $2,900 of dividend income, and $62,000 ordinary business income. b. Assume that Darrel does not materially participate in the partnership. How much of his distributive share from Alcove Partnership is potentially subject to the net investment income tax? Distributive share subject to net investment income tax
Required: 3. Prepare journal entry to record Pedro’s admission. 4. During the first year of operations, the partnership earned P650,000. After Pedro’s admission, the profitand loss sharing ratio is 40:40:20 for Juan, Pablo, and Pedro, respectively, based on capital credits.Drawings were made in these amounts: Juan, P100,000; Pablo, P130,000; Pedro – P56,000. What isthe capital balance of Pedro after the first year?
Newton is a one-third owner of ProRite Partnership. Newton has decided to sell his interest in the business to Dunja for $68,000 cash plus the assumption of his share of ProRite's liabilities. Assume Newton's inside and outside bases in ProRite are equal. ProRite shows the following balance sheet as of the sale date: Assets Cash Receivables Inventory Land Totals Liabilities and capital: Liabilities Capital-Newton Capital-Barbara Capital-Liz Totals Tax Basis $ 96,500 28,000 40, 250 36,500 FMV $ 96,500 28,000 110, 750 23,500 $ 201, 250 $ 258,750 $ 60,000 47,083 47,084 47,083 $ 201, 250 What are the amount and character of Newton's recognized gain or loss?