Joanne acquired a 30% interest in the ABC General Partnership by contributing investment land with an...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Joanne acquired a 30% interest in the ABC General Partnership by contributing investment land with an adjusted basis of $30,000 and a fair market value of $100,000. She originally acquired the land on 2/2/1991. The land was subject to a $40,000 mortgage which was assumed by the ABC partnership as part of the deal. Mary acquired a 70% interest in the partnership in exchange for a capital contribution of $140,000 in cash. Both capital contributions occurred on 1 January 2015. The partnership used the land contributed by Joanne to operate a parking lot. During 2015, the partnership had net rental income of $70,000. In addition, on 13 April 2015, the land was sold for a total sales price of $125,000 ($85,000 of cash, and the buyer assumed the $40,000 mortgage). During 2015, the partnership distributed $30,000 of cash ($9,000 of Joanne & $21,000 to Mary). The partnership had $60,000 of recourse liabilities as of 12/31/2015 (the partnership borrowed $60,000 to provide funds for operations and possible expansion). REQUIRED: A. How much and what type of income and/or loss must Joanne report from 2015 partnership activity? B. What is Joanne's basis in the partnership as of 12/31/2015? Joanne acquired a 30% interest in the ABC General Partnership by contributing investment land with an adjusted basis of $30,000 and a fair market value of $100,000. She originally acquired the land on 2/2/1991. The land was subject to a $40,000 mortgage which was assumed by the ABC partnership as part of the deal. Mary acquired a 70% interest in the partnership in exchange for a capital contribution of $140,000 in cash. Both capital contributions occurred on 1 January 2015. The partnership used the land contributed by Joanne to operate a parking lot. During 2015, the partnership had net rental income of $70,000. In addition, on 13 April 2015, the land was sold for a total sales price of $125,000 ($85,000 of cash, and the buyer assumed the $40,000 mortgage). During 2015, the partnership distributed $30,000 of cash ($9,000 of Joanne & $21,000 to Mary). The partnership had $60,000 of recourse liabilities as of 12/31/2015 (the partnership borrowed $60,000 to provide funds for operations and possible expansion). REQUIRED: A. How much and what type of income and/or loss must Joanne report from 2015 partnership activity? B. What is Joanne's basis in the partnership as of 12/31/2015?
Expert Answer:
Related Book For
South Western Federal Taxation 2015
ISBN: 9781305310810
38th edition
Authors: William H. Hoffman, William A. Raabe, David M. Maloney, James C. Young
Posted Date:
Students also viewed these accounting questions
-
Ed owns investment land with an adjusted basis of $35,000. Polly has offered to purchase the land from Ed for $175,000 for use in a real estate development. The amount offered by Polly is $10,000 in...
-
An office building with an adjusted basis of $320,000 was destroyed by fire on December 30, 2015. On January 11, 2016, the insurance company paid the owner $450,000. The fair market value of the...
-
In 2015, Ryce contributes non-depreciable property with an adjusted basis of $60,000 and a fair market value of $95,000 to the Montgomery Partnership in exchange for a one-half interest in profits...
-
For the following situations, comment on whether inspection by variables or by attributes might be more appropriate: a. Filling packaged food containers to the proper weight. b. Inspecting for...
-
Find the moment of inertia and radius of gyration of a homogeneous (8 a constant) circular lamina of radius a with respect to a diameter.
-
Write the business rules that are reflected in the ERD shown in Figure P2.17.
-
Management is considering three alternatives to satisfy an urgent need. Each of the alternatives will completely satisfy the need, so no combinations have to be considered. The first costs, operating...
-
Master budget Adams Company, a merchandising firm that sells one product, estimates it will sell 12,000 units of its product at $60 per unit in December. In November, the company prepared other...
-
Draw the relational model for this EER for vacation property rentals RENTER Renter ID First Name Middle Initial Last Name Address Phone# EMail Signs HI RENTAL AGREEMENT Agreement ID Begin Date End...
-
What percent of undergraduate enrollment in coed colleges and universities in the United States is male? A random sample of 50 such institutions give the following data (Source USA Today allege...
-
1) A firm sells two different products, A and B. For each unit of B sold, the firm sells two units of A. Total fixed costs$1,260,000. Additional selling prices and cost information for both products...
-
Based on the following schedules, graph the demand and supply curve, and answer the questions below. These are the supply and demand schedules for good X: Quantity Quantity Price Supplied Demanded...
-
Arshadi Corp.'s sales last year were $65,000, and its total assets were $22,000. What was its total assets turnover ratio (TATO)?
-
Please use the textbook "THE LEADER'S COMPANION Insights on Leadership Through the Ages by Thomas Wren"? The Leader's Companion" collectively bring together leaders and theorists in the study and...
-
How do postcolonial authors utilize allusions to colonial histories and indigenous traditions as a means of reclaiming and reinterpreting cultural narratives, subverting colonial perspectives, and...
-
C. When user clicks Distance Converter, an input dialog will pop up where user can type value and click OK: Welcome to Converter Input X X ? Input miles distance to convert 3.1 OK Cancel Exit...
-
1. You can buy a contract which will pay $ 10,000 per year for 3 years for $26,500. If investments of similar risk return 8% per annum, compounded annually, should you buy the contract? 2. How much...
-
On October 31 Juanita Ortega, owner of Outback Guide Service, received a bank statement dated October 30. Juanita found the following: 1. The checkbook has a balance of $2,551.34. 2. The bank...
-
Joseph Thompson is president and sole shareholder of Jay Corporation. In December 2014, Joe asks your advice regarding a charitable contribution he plans to have the corporation make to the...
-
Your ophthalmologist, Dr. Hunter Francis (55 Wheatland Drive, Hampton, CT 06247), has been very pleased with the growth of his practice in the 15 years he has been in business. This growth has...
-
Ostrich Company makes gasoline storage tanks. Everything produced is under contract (that is, the company does not produce until it gets a contract for a product). Ostrich makes three basic models....
-
Use the classical and thermal velocities derived in Problem 23.1 to estimate the ratio of the corresponding "quantum pressure" and classical "thermal pressure." Assume thermal electrons to obey an...
-
Assume a 2D lattice with islands of superconductivity surrounded by regions of insulating behavior. Within each SC island patch \(i\), assume a set of electron Cooper pairs having the same...
-
Prove that an interval without endpoints is homeomorphic to the real number line \(\mathbb{R}\). Thus, boundedness is not a topological invariant. Take \(X=\left(-\frac{\pi}{2}, \frac{\pi}{2} ight)\)...
Study smarter with the SolutionInn App