EBK CONCEPTS IN FEDERAL TAXATION 2019
26th Edition
ISBN: 9781337671774
Author: Murphy
Publisher: CENGAGE LEARNING - CONSIGNMENT
expand_more
expand_more
format_list_bulleted
Question
Chapter 2, Problem 22P
To determine
Identify the related parties.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Amy, Andy, and Anya own 10%, 25%, and
65%, respectively, in the FFF Partnership.
Amy sells securities for their $45,000 FMV
to the partnership. Review the following
independent situations:
a. Amy's basis in the securities is $65,000. The three partners are siblings.
b. Amy's basis in the securities is $85,000. Amy is unrelated to the other partner:
c. Amy's basis in the securities is $20,000. Amy and Anya are sisters. The
partnership will hold the securities as an investment.
d. What are the tax consequences in Part a if the partnership subsequently sells
the securities to an unrelated third party for $73,000? For $56,000? For
$39,000?
Tamara owns interest in two different entities: a partnership and an S-Corp. Her basis in the partnership is $40,000. Her basis in the S-Corp is 23,250. Tamara is the sole owner of the S-Corp.
Assume the partnership gives a current distribution to Tamara of $30,000 cash and land worth $20,000 (basis of $15,000). Determine the following:
Basis of Tamara’s Partnership Interest____________________
2. Basis of Land to Tamara__________________________
Tamara owns interest in two different entities: a partnership and an S-Corp. Her basis in the partnership
is $40,000. Her basis in the S-Corp is 23,250. Tamara is the sole owner of the S-Corp.
a. Assume the partnership gives a current distribution to Tamara of $30,000 cash and land worth
$20,000 (basis of $15,000). Determine the following:
1. Basis of Tamara's Partnership Interest_
2. Basis of Land to Tamara
b. Independent of part (a), assume the partnership gives a liquidating distribution to Tamara of $30,000
cash and two pieces of equipment. Equipment 1 is worth 3,000 (basis: 3,000) and equipment two is
worth 2,000 (basis: 0). Compute the following:
1. Basis of Tamara's Partnership Interest
2. Basis of equipment 1 to Tama
3. Basis of equipment 2 to Tamara
c. Tamara received a cash distribution of $25,500 from her S-Corp. Corporate-level accounts at the end
of the year were as follows.
$9,000
13,500
AAA
OAA
Accumulated E & P
900
Fill out the following table to determine how Tamara's…
Chapter 2 Solutions
EBK CONCEPTS IN FEDERAL TAXATION 2019
Ch. 2 - Prob. 1DQCh. 2 - Prob. 2DQCh. 2 - What is an arms-length transaction? What is its...Ch. 2 - Prob. 4DQCh. 2 - Prob. 5DQCh. 2 - Prob. 6DQCh. 2 - Prob. 7DQCh. 2 - Prob. 8DQCh. 2 - Prob. 9DQCh. 2 - Prob. 10DQ
Ch. 2 - Prob. 11DQCh. 2 - Prob. 12DQCh. 2 - Prob. 13DQCh. 2 - Prob. 14DQCh. 2 - Prob. 15DQCh. 2 - Prob. 16DQCh. 2 - Prob. 17DQCh. 2 - Prob. 18PCh. 2 - Prob. 19PCh. 2 - Prob. 20PCh. 2 - Prob. 21PCh. 2 - Prob. 22PCh. 2 - Prob. 23PCh. 2 - Prob. 24PCh. 2 - Prob. 25PCh. 2 - Prob. 26PCh. 2 - Prob. 27PCh. 2 - Prob. 28PCh. 2 - Prob. 29PCh. 2 - Prob. 30PCh. 2 - Prob. 31PCh. 2 - Prob. 32PCh. 2 - Prob. 33PCh. 2 - Prob. 34PCh. 2 - Prob. 35PCh. 2 - Prob. 36PCh. 2 - Prob. 37PCh. 2 - Prob. 38PCh. 2 - Prob. 39PCh. 2 - Prob. 40PCh. 2 - Prob. 41PCh. 2 - Prob. 42PCh. 2 - Prob. 43PCh. 2 - Prob. 44PCh. 2 - Prob. 45PCh. 2 - Prob. 46PCh. 2 - Prob. 47PCh. 2 - Prob. 48PCh. 2 - Prob. 49PCh. 2 - Prob. 50PCh. 2 - Prob. 51PCh. 2 - Prob. 52PCh. 2 - Prob. 53PCh. 2 - Prob. 54PCh. 2 - Prob. 55PCh. 2 - Prob. 56PCh. 2 - Prob. 57PCh. 2 - Prob. 58PCh. 2 - Prob. 59PCh. 2 - Prob. 60PCh. 2 - Prob. 61PCh. 2 - Prob. 62PCh. 2 - Prob. 63IIPCh. 2 - Prob. 64IIPCh. 2 - Prob. 65IIPCh. 2 - Jerry and his wife, Joanie, own a successful...Ch. 2 - Prob. 67IIPCh. 2 - Prob. 68IIPCh. 2 - Prob. 69IIPCh. 2 - Prob. 70IIPCh. 2 - Prob. 71IIPCh. 2 - Prob. 79DCCh. 2 - Prob. 80DCCh. 2 - Prob. 81TPC
Knowledge Booster
Similar questions
- Sandy and Dan own 40% and 60%, respectively, of the SD Partnership, which manufactures clocks. The partnership is a limited partnership, and Sandy is the only general partner. She works full-time in the business. Dan essentially is an investor in the firm and works ful-time at another job. Dan has no other income except his salary from his full-time employer. During the current year, the partnership reports the following gain and loss: E (Click the icon to view the gain and loss.) 1 (Click the icon to view additional information.) Read the requirements Requirement a. What gain or loss should each partner report on his or her individual tax return? Begin by determining the amount and character of gain or loss Sandy should report. Character Amount - X Requirements What gain or loss should each partner report on his or her individual tax return? а. b. If the partnership borrowed an additional $110,000 of recourse liabilities, how would your answer to Part a change?arrow_forwardWilliam, Xavier and Zelda formed WXZ Partnership. William contributed land with a fair market value of $50,000 (basis of $10,000) in exchange for a 50% interest (capital and profits/losses). Zelda contributed services worth $30,000 in exchange for a 40% profit interest (profit interest only; no capital interest). Xavier owns the remaining interest in the partnership. What is the amount of William's recognized gain on the contribution of land in exchange for his interest in the partnership?arrow_forward1.On September 1, 20X2, Tanya, Cecille, and Marie formed a partnership by combining their separate business proprietorships. Tanya contributed cash of P50,000. Cecille contributed property with P48,000 carrying amount, P56,000 original cost, and P45,000 fair value. The said property has an attached mortgage of P10,000, which will be assumed by the partnership. Marie Contributed a piece of equipment with P50,000 carrying amount, P85,000 original cost, and P45,000 fair value. It was stated in the Articles of Partnership that profits and losses are to be shared equally but is silent regarding capital contributions. Who among the partners has the smallest capital contribution? Justify your answer in no more than five (5) sentences.2. On July 1, 20X2, Cua, Wicas, and Suico organized a partnership. Wicas contributed cash amounting to P600,000 and Cua contributed cash of P300,000 and machinery with a carrying amount of P250,000, the historical cost of P600,000, and market value of P475,000.…arrow_forward
- 1. On September 1, 20X2, Tanya, Cecille, and Marie formed a partnership by combining their separate business proprietorships. Tanya contributed cash of P50,000. Cecille contributed property with P48,000 carrying amount, P56,000 original cost, and P45,000 fair value. The said property has an attached mortgage of P10,000, which will be assumed by the partnership. Marie Contributed a piece of equipment with P50,000 carrying amount, P85,000 original cost, and P45,000 fair value. It was stated in the Articles of Partnership that profits and losses are to be shared equally but is silent regarding capital contributions. Who among the partners has the smallest capital contribution? Justify the answer in no more than five (5) sentences. 2. On July 1, 20X2, Cua, Wicas, and Suico organized a partnership. Wicas contributed cash amounting to P600,000 and Suico contributed cash of P300,000 and machinery with a carrying amount of P250,000, the historical cost of P600,000, and market value of…arrow_forward13. In the AD partnership, Allen's capital is P140,000 and Daniel's is P40,000 and they share income in a 3:1 ratio, respectively. They decide to admit David to the partnership. Allen and Daniel agree that some of the inventory is obsolete. The inventory account is decreased before David is admitted. David invests P40,000 for one-fifth interest in the total capital of P220,000. The journal to record David's admission into the partnership will include: * O a. A credit to Cash for P40,000 O b. A debit to Allen, Capital for P3,000 O c. A credit to David, Capital for P40,000arrow_forwardOn September 1, 20X2, Tanya, Cecille, and Marie formed a partnership by combining their separate business proprietorships. Tanya contributed cash of P50,000. Cecille contributed property with P48,000 carrying amount, P56,000 original cost, and P45,000 fair value. The said property has an attached mortgage of P10,000, which will be assumed by the partnership. Marie Contributed a piece of equipment with P50,000 carrying amount, P85,000 original cost, and P45,000 fair value. It was stated in the Articles of Partnership that profits and losses are to be shared equally but is silent regarding capital contributions. Who among the partners has the smallest capital contribution? Justify the answer in no more than five (5) sentences.arrow_forward
- (1) Read IRC 351 and 357 B. (2) Whitney and Kate are deciding on whether to open up a partnership or a corporation. Please provide three questions to guide them in their decision. (3) Eventually Whitney and Kate decide to open a corporation and own it equally. Whitney transfers a car with a FMV of $25 and a cost basis of $5 in exchange of shares of the new corporation. Kate transfers $50 in exchange of shares of the new corporation. Please explain the tax consequences of: • Whitney • Kate ● Corporationarrow_forwardIn the AD partnership, Allen's capital is P140,000 and Daniel's is P40,000 and they share income in a 3:1 ratio, respectively. They decide to admit David to the partnership. What amount will David have to invest to give him one-fifth percent interest in the capital of the partnership if no goodwill or bonus is recorded?arrow_forwardX and Y form the XY Partnership. X has a 60 percent interest in capital, profits, and losses; Y has 40 percent. X contributes land with a fair market value of $140,000 and a mortgage balance of $20,000. He acquired the land 5 years ago for a total purchase price of $90,000. The mortgage balance, along with the land, is transferred to the partnership. Y contributes $80,000 cash. Calculate X's basis in the partnership AND Y's basis in the partnership. SHOW WORK FOR PARTIAL CREDIT.arrow_forward
- In the ABC partnership the capital balances of Allan, Ben, and Carl, who share income in the ratio of 5:3:2 is 600,000, 400,000, and 300,000, respectively. The partners agreed to admit Dan. Before the admission of Dan, the three current partners agreed that land is to be increased to account for its fair value. In the admission, Dan directly purchases 20% by paying Allan 145,000, Ben 95,000 and Carl 70,000. If there was no gain to any of the three partners for the purchase of interest, by what amount is the land account increased? a) 0 b) 60,000 c) 250,000 d) 510,000arrow_forwardIn the ABC partnership (to which Daniel seeks admittance), the capital balances of Albert, Bert, and Connell, who share income in the ratio of 5:3:2 are: Albert $500,000 Bert 300,000 Connell 200,000 Based on the preceding information, what amount of goodwill will be recorded if Daniel invests $300,000 for a 20% interest? 250,000 100,000 150,000 200,000arrow_forwardBlake and Ryan form the Poole Partnership. Blake contributes cash of $15,000. Ryan contributes land with an adjusted basis of $10,000 and a fair market value of $21,000. The land is subject to a $6,000 mortgage that Poole assumes. Blake and Ryan both receive a 50 percent interest in Poole. What is Ryan's recognized gain or loss on the contribution? a.$11,000 loss b.$5,000 gain c.$16,000 gain d.$4,000 loss e.None of these choices are correct.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
