Required information [The following information applies to the questions displayed below.] Ray and Chuck own 50 percent capital and profits interests in Alpine Properties LLC. Alpine builds and manages rental real estate, and Ray and Chuck each workspercent capital and profits interests in Alpine Properties LLC. Alpine builds and manages rental real estate, and Ray and Chuck each works full time (over full time (over 1,000 hours per year) managing Alpine. Alpine's debt (at both the beginning and end of the year) consists of $1,640,000 in nonrecourse mortgages obtained from an unrelated bank and secured by various rental properties. At the beginning of the current year, Ray and Chuck each had a tax basis of $250,000 in his respective LLC interest, including his share of the nonrecourse mortgage debt. Alpine's ordinary business losses for the current year totaled $546,000, and neither member is involved in other activities that generate passive income. Assume CARES Act applies. (Leave no answer blank. Enter zero if applicable.) How much of each member's loss is suspended because of the passive act s limitation? [Hint: See I.R.C. S469(c)(7).] Ray Chuck Loss suspended

Required information [The following information applies to the questions displayed below.] Ray and Chuck own 50 percent capital and profits interests in Alpine Properties LLC. Alpine builds and manages rental real estate, and Ray and Chuck each workspercent capital and profits interests in Alpine Properties LLC. Alpine builds and manages rental real estate, and Ray and Chuck each works full time (over full time (over 1,000 hours per year) managing Alpine. Alpine's debt (at both the beginning and end of the year) consists of $1,640,000 in nonrecourse mortgages obtained from an unrelated bank and secured by various rental properties. At the beginning of the current year, Ray and Chuck each had a tax basis of $250,000 in his respective LLC interest, including his share of the nonrecourse mortgage debt. Alpine's ordinary business losses for the current year totaled $546,000, and neither member is involved in other activities that generate passive income. Assume CARES Act applies. (Leave no answer blank. Enter zero if applicable.) How much of each member's loss is suspended because of the passive act s limitation? [Hint: See I.R.C. S469(c)(7).] Ray Chuck Loss suspended

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter5: Introduction To Business Expenses

Section: Chapter Questions

Problem 48P

See similar textbooks

Similar questions

XYZ, LLC, has several individual and corporate... YZ, LLC, has several individual and corporate members. Abe and Joe, individuals with 4/30 year-ends, each have a 23 percent profits and capital interest. RST, Incorporated, a orporation with a 6/30 year-end, owns a 4 percent profits and capital interest, while DEF, Incorporated, a corporation with an 8/30 year-end, owns a 4.9 percent profits and apital interest. Finally, 30 other calendar year-end individual partners (each with less than a 2 percent profits and capital interest) own the remaining 45 percent of the profits nd capital interests in XYZ. What tax year-end should XYZ use, and which test or rule requires this year-end? Multiple Choice 4/30, principal partners test 4/30, least aggregate deferral test 12/31, principal partners test 12/31, least aggregate deferral test
Required information [The following information applies to the questions displayed below.] Julio and Milania are owners of Falcons Corporation, an S corporation. Each owns 50 percent of Falcons Corporation. In year 1, Julio and Milania each received distributions of $14,000 from Falcons Corporation. \table[[\table[[Falcons Corporation (an S Corporati],[Income Statement],[December 31 , Year 1 and Year 2]],Year 1,Year 2],[\table[[Sales revenue],[Cost of goods sold],[Salary to owners Julio and Milania],[Employee wages],[Depreciation expense],[Section 179 expense],[Interest income (related to business income)],[Municipal bond income],[Government fines]],\table[[305,000],[(43,000)
58. This year, Callie and Neil formed CN LLC. Callie contributed $300,000 of cash, and Neil contributed real estate valued at $450,000 (basis of $200,000). The property was subject to a recourse liability of $150,000 that was assumed by the LLC, but which is not guaranteed by either LLC member. Callie and Neil’s profit sharing ratios are 40%/60%, respectively, but the loss sharing ratios are 50%/50%. Is the debt treated as a recourse debt or a nonrecourse debt to the LLC members? How is the debt allocated between Callie and Neil? What are Neil’s and Callie’s bases in the LLC interest immediately after the LLC was formed? Show your calculations.
When High Horizon LLC was formed, Maude contributed the following assets in exchange for a 25 percent capital and profits interest in the LLC:Basis Fair Market ValueCash $20,000 $20,000Land* 100,000 360,000Totals $120,000 $380,000*nonrecourse debt secured by the land equals $160,000+James, Harold, and Jenny each contributed $220,000 in cash for a 25 percent profits and capital interest.Following the format in Exhibit 20-2, prepare a tax basis balance sheet for High Horizon LLC showing the tax capital accounts for the members.
Check my work Wozniacki and Wilcox form Jewel LLC, with each investor receiving a one-half interest in the capital and profits of the LLC. Wozniacki receives his one-half interest as compensation for tax planning services that he rendered prior to the formation of the LLC. Wilcox contributes $50,000 cash. The value of a one-half capital interest in the LLC (for each of the parties) is $50,000. Compute Wozniacki’s realized and recognized gain from joining Jewel. Generally, formation of LLC is treated the same as a partnership and no gain or loss is recognized at formation. One of the exceptions to this provision is when capital interest is received as compensation for services rendered. When this happens, it is not a tax-deferred transaction because services are not treated as “property” Since Wozniacki receives his half interest in the partnership for services rendered with a FMV of $50,000, he has a realized and recognized gain of $50,000 of ordinary income…
Jonathan owns 100% of Lemon Company (a calendar year entity). In the current year, Lemon recognizes a long-term capital gain of $70,000 and no other income (or loss). Jonathan is in the 37% tax bracket (and 20% tax bracket for any net capital gains or dividends) and has no recognized capital gains (or losses) before considering his ownership interest in Lemon Company. What is the income tax result from the $70,000 if Lemon is (a) an LLC and (b) a C corporation? Question Content Area a. If Lemon is an LLC: Assuming no election has been filed under the Check-the-box Regulations, the tax on the $70,000 long-term capital gain is $fill in the blank 622729fd8f91fc1_1 70,000 . Feedback Area Feedback Question Content Area b. If Lemon is a C corporation: The tax on the $70,000 long-term capital gain is $fill in the blank 57a3df008051001_1 14,000 . Feedback Area Feedback
Ray and Matias own 50 percent capital and profits interests in Alpine Properties LLC. Alpine builds and manages rental real estate, and Ray and Matias each works full time (over 1,000 hours per year) managing Alpine. Alpine's liabilities (at both the beginning and end of the year) consist of $1,550,000 in nonrecourse mortgages obtained from an unrelated bank and secured by various rental properties. At the beginning of the current year, Ray and Matias each had a tax basis of $250,000 in his respective LLC interest, including his share of the nonrecourse mortgage liability. Alpine's ordinary business losses for the current year totaled $610,000, and neither member is involved in other activities that generate passive income. a. How much of each member's loss is suspended because of the tax-basis limitation? b. How much of each member's loss is suspended because of the at-risk limitation?
Ray and Matias own 50 percent capital and profits interests in Alpine Properties LLC. Alpine builds and manages rental real estate, and Ray and Matias each works full time (over 1,000 hours per year) managing Alpine. Alpine's liabilities (at both the beginning and end of the year) consist of $1,550,000 in nonrecourse mortgages obtained from an unrelated bank and secured by various rental properties. At the beginning of the current year, Ray and Matias each had a tax basis of $250,000 in his respective LLC interest, including his share of the nonrecourse mortgage liability. Alpine's ordinary business losses for the current year totaled $610,000, and neither member is involved in other activities that generate passive income. c. How much of each member's loss is suspended because of the passive activity loss limitation? [Hint: See §469(c)(7).] d. If both Ray and Matias are single and Ray has a current-year loss of $55,000 from a sole proprietorship, how much trade or business loss can…
Tom is talking to his friend Bob, who has an interest in Freedom, LLC, about purchasing his LLC interest. Bob's outside basis in Freedom, LLC is $8,500. This includes his $2,200 one-fourth share of the LLC's debt. Bob's 704(b) capital account is $15,500. If Tom bought Bob's LLC interest for $14,000, what would Tom's outside basis be in Freedom, LLC?
In the current year, Tom , Jay , and Dana form Ares Corporation. Tom contributes land (a capital asset) having a $62,500 FMV (fair market value) in exchange for 165 shares of stock. He purchased the land three years ago for $65,000. Jay contributes machinery (Sec. 1231 property purchased four years ago) having a $115,000 adjusted basis and a $37,500 FMV in exchange for 105 shares of Ares stock. Dana contributes services worth $25,000 in exchange for 60 shares of Ares stock.
In the current year, Dan, Jay, and Erin form Zeus Corporation. Dan contributes land (a capital asset) having a $75,000 FMV (fair market value) in exchange for 85 shares of Zeus stock. He purchased the land three years ago for $100,000. Jay contributes machinery (Sec. 1231 property purchased four years ago) having a $115,000 adjusted basis and a $45,000 FMV in exchange for 75 shares of Zeus stock. Erin contributes services worth $30,000 in exchange for 10 shares of Zeus stock. A. What is the amount of Dan's recognized gain or loss? b.What is Dan's basis in his Zeus shares? When does his holding period begin? c.What is the amount of Jay's recognized gain or loss? d. What is Jay's basis in his Zeus shares? When does his holding period begin? e.How much income, if any, does Erin recognize? f.What is Erin's basis in her Zeus shares? When does her holding period begin? g. What is Zeus's basis in the land and the machinery? When does its holding period begin? How…