Joe and Clara contribute property to form JC Partnership on January 1, 2019. Joe contributes land...
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Joe and Clara contribute property to form JC Partnership on January 1, 2019. Joe contributes land with a basis and FMV of $60,000. The land is encumbered by a $35,000 loan. Clara on the other hand contributed $25,000 cash. During 2019, JC Partnership borrowed $100,000 to construct a parking lot on the land. At the end of 2019, JC Partnership had payables of $10,000 owing to various suppliers. During 2020, JC Partnership paid back all of its loans and payables outstanding and made a distribution to Joe of $120,000 and to Clara of $90,000. JC Partnership had a total net income of $150,000 for 2020. There was zero net income in 2019. Required: First, calculate each of Joe's and Clara's basis in the partnership as of December 31, 2019. Second, calculate Joe's and Clara's basis in the partnership as of December 31, 2020. Include the tax effects to each partner of the distributions made in 2020. (Show your work) Joe and Clara contribute property to form JC Partnership on January 1, 2019. Joe contributes land with a basis and FMV of $60,000. The land is encumbered by a $35,000 loan. Clara on the other hand contributed $25,000 cash. During 2019, JC Partnership borrowed $100,000 to construct a parking lot on the land. At the end of 2019, JC Partnership had payables of $10,000 owing to various suppliers. During 2020, JC Partnership paid back all of its loans and payables outstanding and made a distribution to Joe of $120,000 and to Clara of $90,000. JC Partnership had a total net income of $150,000 for 2020. There was zero net income in 2019. Required: First, calculate each of Joe's and Clara's basis in the partnership as of December 31, 2019. Second, calculate Joe's and Clara's basis in the partnership as of December 31, 2020. Include the tax effects to each partner of the distributions made in 2020. (Show your work)
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To calculate Joes and Claras basis in the JC Partnership as of December 31 2019 and then as of Decem... View the full answer
Related Book For
Fundamentals Of Taxation 2015
ISBN: 9781259293092
8th Edition
Authors: Ana Cruz, Michael Deschamps, Frederick Niswander, Debra Prendergast, Dan Schisler, Jinhee Trone
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