Case $1$

DEF Services is owned by individuals, Mac, Norm, Otto, and Paul. They share profits and losses $40$:$30$:$15$:$15.$ Mac and Norm have tax years ending $6/30.$ Otto and Paul use the calendar year.

The partnership$$s activities for the tax year ending $6/30/-$Y$2$ are:

Sales

$$350,000$

Cost of goods sold

$$150,000$

Jobs credit

$$8,000$

$1231$ gain, $10-15-$Y$1$

$$60,000$

Muni Bd interest

$$24,000$

Charitable contribution

$$6,000$

Tasks:

Allocate the partnership$$s income and other receipts$/$payments to its four partners for their tax years ending in Year $2.$

Mac received guaranteed payments of $$12,000$ per month through the year ending $6/30/($Y$2).$ Norm received guaranteed payments of $$1,500$ per month for the year ending $6/30/-$Y$2.$ Otto and Paul each receive capital account withdrawals of $$7,500$ per month. Allocate the partnership$$s income and other receipts$/$payments to its four partners for their tax years ending in Y$2.$

Case $2$

Three individuals form the ABC partnership and each contribute the following to form the partnership:

Cash: $$35,000\mathrm{.}00$

Future services to be rendered to the partnership worth: $$350,000$

Real property with a basis of $$300,000\mathrm{.}00$ and a fair market value of $$350,000\mathrm{.}00.$

Tasks:

What is each partner$$s original basis in the partnership interest?

What is the partnership$$s basis in each partner$$s contribution?

Case $3$

Greg owns a $50$ percent share of the Rich and Greg RG law firm partnership. Both partners and the entity are on the calendar year for tax purposes. Greg$$s basis in the partnership interest at the beginning of the year is $$300,000.$ The partnership$$s relevant data for year $1$ includes the following:

Partnership ordinary income $$500,000$

Partnership municipal bond interest $$100,000$

Greg capital; account withdrawals $$250,000$

December $31$st $($end of year$)$ cash distribution to the partners $$150,000$

December $31$st $($end of year$)$ property distribution to Greg: fair$-$market value $$30,000$

Basis $$25,000$

Partnership$$s liabilities January $1$st $($beginning of year$)$ $$20,000$

Partnership$$s liabilities December $31$st $($end of year$)$ $$100,000$

Tasks:

What is Greg$$s basis in the partnership before the December $31$st distributions?

What is Greg$$s basis in the property distributed?