Problem 47

LO.3, 7, 9, 10 Suzy contributed assets valued at $360,000 (basis of $200,000) in exchange for her 40% interest in Suz-Anna GP (a general partnership). Anna contributed land and a building valued at $640,000 (basis of $380,000) in exchange for the remaining 60% interest. Annas property was encumbered by a qualified nonrecourse debt of $100,000, which was assumed by the partnership. The partnership reports the following income and expenses for the current tax year:

Sales	$560,000
Utilities, salaries, and other operating expenses	360,000
Short-term capital gain	10,000
Tax-exempt interest income	4,000
Charitable contributions	8,000
Distribution to Suzy	10,000
Distribution to Anna	20,000

During the current tax year, Suz-Anna refinanced the land and building. At the end of the year, Suz-Anna had recourse debt of $100,000 for partnership accounts payable and qualified nonrecourse debt of $200,000.

a.What is Suzys basis after formation of the partnership? Annas basis?

b.What income and separately stated items does the partnership report on Suzys Schedule K1? What items does Suzy report on her tax return?

c.Assume that all partnership debts are shared proportionately. At the end of the tax year, what are Suzys basis and amount at risk in her partnership interest?

Need problem 47 to work problem 48, problem 48 is the problem I am looking for.

LO.11 Assume the same facts as in Problem 47, and assume that Suz-Anna prepares the capital account rollforward on the partners Schedules K1 on a tax basis.

a.What is Suzys capital account balance at the beginning of the tax year?

b.What is Suzys capital account balance at the end of the tax year?

c.What accounts for the difference between Suzys ending capital account and her ending tax basis in the partnership interest?