The TimpRiders LP has operated a motorcycle dealership for a number of years. Lance Is the limited partner, Francesca is the general partner, and they share capital and profits equally. Francesca works full time managing the partnership. Both the partnership and the partners report on a calendar-year basis. At the start of the current year, Lance and Francesca had bases of $12,000 and $5,000, respectively, and the partnership did not have any llabilitles. During the current year, the partnership reported the following results from operations: $ 711,000 530, e00 197,000 4,eee 4,000 8,000 Net sales Cost of goods sold Operating expenses Short-term capital loss Tax-exempt interest $1231 gain On the last day of the year, the partnership distributed $5,000 each to Lance and Francesca.
The TimpRiders LP has operated a motorcycle dealership for a number of years. Lance Is the limited partner, Francesca is the general partner, and they share capital and profits equally. Francesca works full time managing the partnership. Both the partnership and the partners report on a calendar-year basis. At the start of the current year, Lance and Francesca had bases of $12,000 and $5,000, respectively, and the partnership did not have any llabilitles. During the current year, the partnership reported the following results from operations: $ 711,000 530, e00 197,000 4,eee 4,000 8,000 Net sales Cost of goods sold Operating expenses Short-term capital loss Tax-exempt interest $1231 gain On the last day of the year, the partnership distributed $5,000 each to Lance and Francesca.
Chapter4: Gross Income: Concepts And Inclusions
Section: Chapter Questions
Problem 43P
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[The following Information applies to the questions displayed below.]
The TimpRiders LP has operated a motorcycle dealership for a number of years. Lance is the limited partner, Francesca is
the general partner, and they share capital and profits equally. Francesca works full time managing the partnership. Both
the partnership and the partners report on a calendar-year basis. At the start of the current year, Lance and Francesca had
bases of $12,000 and $5,000, respectively, and the partnership did not have any labilitles. During the current year, the
partnership reported the following results from operations:
$ 711,000
530, 000
197,000
Net sales
Cost of goods sold
Operating expenses
Short-term capital loss
Tax-exempt interest
$1231 gain
4,00e
4, 00e
8,000
On the last day of the year, the partnership distributed $5000 each to Lance and Francesca.
a. What outside basis do Lance and Francesca have in their partnership Interests at the end of the year?
b. How much of their losses are currently not deductible by Lance and Francesca because of the tax-basis limitation?
C. To what extent does the passive activity loss limitation apply In restricting their deductible losses for the year?
(For all the requlrements, negetive amounts should be entered with a minus sign. Leave no answer blank. Enter zero If applicable.)
Lance
Francesca
a. Year end basis
D. Loss limited by tax basis
c Loss limited by passive activity](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F77c60c3d-f0cf-4933-ba95-ad1d050df9e3%2Ffcea8f5b-a4fe-41f3-b86d-59c7f617cb67%2Fg2iqfg_processed.jpeg&w=3840&q=75)
Transcribed Image Text:ework
Saved
Requlred Information
[The following Information applies to the questions displayed below.]
The TimpRiders LP has operated a motorcycle dealership for a number of years. Lance is the limited partner, Francesca is
the general partner, and they share capital and profits equally. Francesca works full time managing the partnership. Both
the partnership and the partners report on a calendar-year basis. At the start of the current year, Lance and Francesca had
bases of $12,000 and $5,000, respectively, and the partnership did not have any labilitles. During the current year, the
partnership reported the following results from operations:
$ 711,000
530, 000
197,000
Net sales
Cost of goods sold
Operating expenses
Short-term capital loss
Tax-exempt interest
$1231 gain
4,00e
4, 00e
8,000
On the last day of the year, the partnership distributed $5000 each to Lance and Francesca.
a. What outside basis do Lance and Francesca have in their partnership Interests at the end of the year?
b. How much of their losses are currently not deductible by Lance and Francesca because of the tax-basis limitation?
C. To what extent does the passive activity loss limitation apply In restricting their deductible losses for the year?
(For all the requlrements, negetive amounts should be entered with a minus sign. Leave no answer blank. Enter zero If applicable.)
Lance
Francesca
a. Year end basis
D. Loss limited by tax basis
c Loss limited by passive activity
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