Individual Income Taxes
43rd Edition
ISBN: 9780357109731
Author: Hoffman
Publisher: CENGAGE LEARNING - CONSIGNMENT
expand_more
expand_more
format_list_bulleted
Concept explainers
Question
Chapter 18, Problem 39P
a.
To determine
Determine the tax year that Joint venture must adopt for the given circumstances.
b.
To determine
Determine the tax year that Joint venture must adopt for the given circumstances.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Red, White, and Blue are unrelated corporations engaged in real estate devel- opment. The three corporations formed a joint venture (treated as a partner- ship) to develop a tract of land. Assuming that the venture does not have a natural business year, what tax year must the joint venture adopt under the following circumstances? (attached picture)
Joe and Sunny intend to enter into a business venture together and decided that a corporation would be a desirable entity choice for federal income tax purposes. The corporation is named JS Inc. (“JS”). For newly established JS, Joe intends to contribute Property A with a fair market value (“FMV”) of $800 and basis of $300, subject to debt of $200. Sunny intends to contribute cash of $800. JS is elected to be treated as an S corporation for federal income tax purposes.
1. Provide Joe’s basis in JS upon contribution (i.e., Year 0) of Property A.
2. Provide Sunny’s basis in JS upon contribution (i.e., Year 0) of cash.
3. Provide JS’s basis in Property A and cash immediately after the contribution.
4. Assuming Joe’s and Sunny’s basis in the JS stock remain the same after the contributions for Year 1, determine Joe’s and Sunny’s basis when JS distributes $400 of cash to Joe and Sunny.
5. Assume the following: 1) there are no AAA, OAA, and AEP; 2) the debt of $200 is still treated as a loan…
oe and Sunny intend to enter into a business venture together and decided that an S corporation would be a desirable entity choice for federal income tax purposes. The corporation is named JS Inc. (“JS”). For newly established JS, Joe intends to contribute Property A with a fair market value (“FMV”) of $800 and basis of $300. Sunny intends to contribute cash of $800.
Now assume the fact that Joe contributes Property with a FMV of $800 and basis of $300, but subject to debt of $500.
Â
54. Provide Joe’s basis in JS upon contribution.
Â
Â
55. Provide JS’s basis in Property A immediately after the contribution.
Â
Â
Now assume that Joe receives cash of $300 and stock for his contribution of Property A with a FMV of $800 and basis of $300, subject to no debt.
Â
56. Provide Joe’s basis in JS upon contribution.
Â
Â
57. Provide JS’s basis in Property A immediately after the contribution.
Chapter 18 Solutions
Individual Income Taxes
Ch. 18 - Prob. 1DQCh. 18 - Prob. 2DQCh. 18 - Prob. 3DQCh. 18 - Prob. 4DQCh. 18 - Prob. 5DQCh. 18 - Prob. 6DQCh. 18 - Prob. 7DQCh. 18 - LO.2 In 2019, the taxpayer became ineligible to...Ch. 18 - LO.2 Osprey Corporation, an accrual basis...Ch. 18 - Prob. 10DQ
Ch. 18 - Prob. 11DQCh. 18 - Prob. 12DQCh. 18 - LO.2 Emerald Motors is an automobile dealer. The...Ch. 18 - Prob. 14DQCh. 18 - Prob. 15DQCh. 18 - Prob. 16DQCh. 18 - Prob. 17DQCh. 18 - LO.4, 7 In December 2019, Carl Corporation sold...Ch. 18 - LO.2, 5 What are the similarities between the crop...Ch. 18 - Prob. 20DQCh. 18 - Prob. 21DQCh. 18 - Prob. 22DQCh. 18 - LO.6 Largo Company is an engineering consulting...Ch. 18 - Prob. 24DQCh. 18 - Prob. 25DQCh. 18 - Prob. 26DQCh. 18 - Prob. 27CECh. 18 - LO.2 Gaffney Corporation is a wholesale...Ch. 18 - Prob. 29CECh. 18 - LO.2 In 2019, Chaya Corporation, an accrual basis,...Ch. 18 - Prob. 31CECh. 18 - Prob. 32CECh. 18 - Prob. 33CECh. 18 - Prob. 34CECh. 18 - Prob. 35CECh. 18 - Prob. 36CECh. 18 - Prob. 37CECh. 18 - Prob. 38CECh. 18 - Prob. 39PCh. 18 - Prob. 40PCh. 18 - Prob. 41PCh. 18 - In 2018, Juan entered into a contract to write a...Ch. 18 - Prob. 43PCh. 18 - Compute Marys income or deductions for 2019 using...Ch. 18 - What accounting method (cash or accrual) would you...Ch. 18 - Blue Company, an architectural firm, has a...Ch. 18 - How do the all events and economic performance...Ch. 18 - Ross Company is a C corporation providing property...Ch. 18 - Prob. 49PCh. 18 - Prob. 50PCh. 18 - Floyd, a cash basis taxpayer, has received an...Ch. 18 - Prob. 52PCh. 18 - Prob. 53PCh. 18 - On June 30, 2019, Kelly sold property for 240,000...Ch. 18 - Prob. 55PCh. 18 - Prob. 56PCh. 18 - Prob. 57PCh. 18 - Prob. 58PCh. 18 - Prob. 59PCh. 18 - Ostrich Company makes gasoline storage tanks....Ch. 18 - Prob. 61PCh. 18 - Grouse Company is a furniture retailer whose...Ch. 18 - Lavender Manufacturing Company began business in...Ch. 18 - Silver Creek Ranch LLC is a small, family-owned...Ch. 18 - In 2019, Gail changed from the lower of cost or...Ch. 18 - At the end of 2020, Magenta Manufacturing Company...Ch. 18 - Prob. 67PCh. 18 - Prob. 68PCh. 18 - Prob. 69PCh. 18 - Prob. 1RPCh. 18 - Prob. 2RPCh. 18 - Prob. 3RPCh. 18 - Paula has sales that qualify to be reported on the...
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- In general terms, indicate how the following separate entities are subject to the Federal income tax. a.  C corporations are separate taxable entities, (but not district from/distinct from) their shareholders. b.  How are partnerships taxed?Income & losses pass-through to the partners/at the partnership level/at the partnership and partner level . c.  S corporations ( never/normally/rarely) incur Federal income tax liabilities. d.  Fiduciary entities are subject to Federal income tax when income (exceeds expenses/ is distributed to the beneficiaries/ is retained by the entity) .arrow_forwardWhich of the following statements regarding income recognition is true? A. Owners in a regular corporation realize entity level income at the time the income is earned. B. Owners of an S corporation realize entity level income in the tax year in which the S corporation's year ends. C. Partnership income is recognized in the year in which it is distributed to the partners. D. Sole proprietorship income is recognized at the time the income is distributed to the owner.arrow_forwardTwo individuals who were previously sole proprietors formed a partnership. Property other than cash which is part of the initial investment in the partnership would be recorded for financial accounting purposes at the   -fair value of the property at the date of the investment. -proprietors’ book values or the fair value of the property at the date of the investment, whichever is lower. -proprietors’ book values or the fair value of the property at the date of the investment, whichever is higher. -proprietors’ book values of the property at the date of the investment.  Equity securities acquired for trading shall be measured at   -cost plus directly attributable transaction cost -fair value, with the change in fair value taken to other comprehensive income -cost less directly attributable transaction cost -fair value, with the change in fair value taken to profit or loss.arrow_forward
- Two individuals who were previously sole proprietors formed a partnership. Property other than cash which is part of the initial investment in the partnership would be recorded for financial accounting purposes at the  a. fair value of the property at the date of the investment  b. proprietors’ book values or the fair value of the property at the date of the investment, whichever is higher  c. proprietors’ book values or the fair value of the property at the date of the investment, whichever is lower.  d. proprietors’ book values of the property at the date of the investment.arrow_forwardPartnerships and S corporations may elect a year that does not end on December 31 if: a. A business purpose for the year can be demonstrated. b. The entity retains the same year as was used for fiscal year ending in 1987 , provided the entity agrees to make required tax payments. c. The partnership's or S corporation's year results in a deferral of not more than three months' income and the entity agrees to make required tax payments. d. a and c only e. All of the abovearrow_forwardwhich of the following statements regarding entities is true ? (a) c corporation is an incorporated entity chartered under federal law (b)an s corporation is a creature of state tax law (c)in a limited liability company none of the members bear personal liability for the debts and obligations of the entity (d)in a limited partnership the partners bear personal liability for the debts and obligations of the partnershiparrow_forward
- Which of the following events is an intercompany transaction that requires the deferral and later recognition of income?Jackson and Tanker Corporations are members of an affiliated group. The two corporations have been affiliated since they were formed last year. Both corporations have always used a calendar year as their tax year. Tanker, the subsidiary, has a separate return year NOL of $14,000 from last year. Jackson Corporation has a separate return year NOL of $16,000 from last year. Commencing this year, the two corporations filed a consolidated tax return. The NOLs can be carried overarrow_forwardThe difference between partnership and corporation can be best described in which of the following statements? a. In a corporation, income is taxed at the corporate level, whereas, in a partnership, income is taxed twice. b. In a partnership, income is taxed once at the individual level; whereas, in a corporation, income is taxed twice c. Income from both forms of organizations is double-taxed. d. In a partnership, income is exempted from tax up to $10 million; whereas, in a corporation, income is taxed twicearrow_forwardThis year, Agustin’s distributive share from Eden Lakes Partnership includes $14,000 of interest income, $8,000 of net long-term capital gains, $15,000 net §1231 gain from the sale of property used in the partnership's trade or business, and $83,000 of ordinary business income. a. Assume that Agustin materially participates in the partnership. How much of his distributive share from Eden Lakes Partnership is potentially subject to the net investment income tax? b. Assume that Agustin does not materially participate in the partnership. How much of his distributive share from Eden Lakes Partnership is potentially subject to the net investment income tax?arrow_forward
- Which of the following statements is true related to the conversion of a regular corporation to a limited liability company taxed as a partnership? A. In the conversion of a C corporation to an LLC taxed as a partnership, the transfer of appreciated assets from the liquidating corporations is not taxed at the corporate level. B. The corporation can contribute it's assets and liabilities into the new LLC in exchange for ownership interests. The corporation then distributes the LLC interests to it's shareholders in liquidation of the shareholders corporate stock. C. If the corporation distributes it's assets and liabilities to it's shareholders in liquidation of the new corporation, the shareholders are restricted from contributing these assets into the new partnership. D. The existence of substantially appreciated intangibles and goodwill with little or no tax basis has no consequences when converting a C corporation to an LLCarrow_forwardThis year, Agustin’s distributive share from Eden Lakes Partnership includes $14,000 of interest income, $8,000 of net long-term capital gains, $15,000 net §1231 gain from the sale of property used in the partnership's trade or business, and $83,000 of ordinary business income.  a. Assume that Agustin materially participates in the partnership. How much of his distributive share from Eden Lakes Partnership is potentially subject to the net investment income tax?arrow_forwardWhich of the following statements about partnerships is true? Group of answer choices a)Partnerships must file their tax returns on a calendar year basis. b)No gain or loss is ever recognized in transactions between partners and a partnership. c)Gain is never recognized by a partner on a contribution of property to a partnership. d)A partner's initial basis in a partnership interest is equal to the basis of the property transferred (plus cash contributed) to the partnership, adjusted for any gain recognized on the transfer and reduced for liabilities assumed by the other partners. e)The partnership's basis in property contributed by a partner is equal to the fair market value of the property on the date of the transfer.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
