Suzy contributed business-related assets valued at $360,000 (basis of $200,000) in exchange for her 40% interest in
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Sales................. $560,000
Utilities, salaries, and other operating expenses 360,000
Short-term capital gain.......... 10,000
Tax-exempt interest income......... 4,000
Charitable contributions.......... 8,000
Distribution to Suzy............ 10,000
Distribution to Anna........... 20,000
At the end of the year, Suz-Anna held recourse debt of $100,000 for partnership accounts payable and qualified nonrecourse debt of $200,000.
a. What is Suzy's basis after formation of the partnership? Anna's basis?
b. What income and separately stated items does Suz-Anna report on Suzy's Schedule K-1? What items does Suzy report on her tax return?
c. All partnership debts are shared proportionately. At the end of the tax year, what are Suzy's basis and amount at risk in her partnership interest?
Accounts Payable
Accounts payable (AP) are bills to be paid as part of the normal course of business.This is a standard accounting term, one of the most common liabilities, which normally appears in the balance sheet listing of liabilities. Businesses receive... Partnership
A legal form of business operation between two or more individuals who share management and profits. A Written agreement between two or more individuals who join as partners to form and carry on a for-profit business. Among other things, it states...
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Related Book For
South Western Federal Taxation 2015 Essentials Of Taxation Individuals And Business Entities
ISBN: 9781285438290
18th Edition
Authors: James Smith, William Raabe, David Maloney, James Young
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