Amy and Mitchell are equal partners in the accrual basis AM Partnership. At the beginning of the
Question:
Amy and Mitchell are equal partners in the accrual basis AM Partnership. At the beginning of the current tax year, Amy’s capital account has a balance of $300,000, and the partnership has recourse debts of $200,000 payable to unrelated parties. Assume that all partnership recourse debt is shared equally between the partners. The following information about AM’s operations for the current year is obtained from the partnership’s records:
Ordinary income ………………………… $400,000
Interest income …………………………….. 4,000
Long-term capital loss …………………….. 6,000
Short-term capital gain…………………….. 12,000
Charitable contribution …………………… 4,000
Cash distribution to Amy ………………… 20,000
Assume that year-end partnership debt payable to unrelated parties is $140,000. If all transactions are reflected in her beginning capital and basis in the same manner, what is Amy’s basis in the partnership interest:
a. At the beginning of the year?
b. At the end of the year?
DistributionThe word "distribution" has several meanings in the financial world, most of them pertaining to the payment of assets from a fund, account, or individual security to an investor or beneficiary. Retirement account distributions are among the most... 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...
Step by Step Answer:
South Western Federal Taxation 2016 Corporations Partnerships Estates And Trusts
ISBN: 9781305399884
39th Edition
Authors: James Boyd, William Hoffman, Raabe, David Maloney, Young