Sean is admitted to the calender year XYZ Partnership on December 1 of the current year in return for his services managing the partnerships business during the year The partnership reports ordinary income of $100,000 for the current year without considering this transaction Assume a nonleap year a...

a Sean reports 75000 of ordinary income and has a 75000 basis in his partnership interest The partne ...

Sean is admitted to the calender year XYZ Partnership on December 1 of the current year in

Question:

Sean is admitted to the calender year XYZ on December 1 of the current year in return for his services managing the partnership’s business during the year. The reports ordinary income of $100,000 for the current year without considering this transaction. Assume a nonleap year.
a. What are the tax consequences to Sean and the calendar year XYZ if Sean receives a 20% capital and profits interest in the with a $75,000 FMV?
b. What are the tax consequences to Sean and the XYZ if Sean receives only a 20% profits interest with no determinable FMV? 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...