The TimpRiders LP has operated a motorcycle dealership for a number of years. Amir is the...
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The TimpRiders LP has operated a motorcycle dealership for a number of years. Amir is the limited partner, Francesca is the general partner, and they share capital and profits equally. Francesca works full time managing the partnership. Both the partnership and the partners report on a calendar-year basis. At the start of the current year, Amir and Francesca had bases of $13,600 and $5,600, respectively, and the partnership did not have any liabilities. During the current year, the partnership reported the following results from operations: Net sales Cost of goods sold $ 717,000 539,000 202,000 5,500 9,000 13,000 Operating expenses Short-term capital loss Tax-exempt interest §1231 gain On the last day of the year, the partnership distributed $5,600 each to Amir and Francesca. Required: a. What outside basis do Amir and Francesca have in their partnership interests at the end of the year? b. How much of their losses are currently not deductible by Amir and Francesca because of the tax-basis limitation? c. To what extent does the passive activity loss limitation apply in restricting their deductible losses for the year? Note: For all the requirements, negative amounts should be entered with a minus sign. Leave no answers blank. Enter zero if applicable. The TimpRiders LP has operated a motorcycle dealership for a number of years. Amir is the limited partner, Francesca is the general partner, and they share capital and profits equally. Francesca works full time managing the partnership. Both the partnership and the partners report on a calendar-year basis. At the start of the current year, Amir and Francesca had bases of $13,600 and $5,600, respectively, and the partnership did not have any liabilities. During the current year, the partnership reported the following results from operations: Net sales Cost of goods sold $ 717,000 539,000 202,000 5,500 9,000 13,000 Operating expenses Short-term capital loss Tax-exempt interest §1231 gain On the last day of the year, the partnership distributed $5,600 each to Amir and Francesca. Required: a. What outside basis do Amir and Francesca have in their partnership interests at the end of the year? b. How much of their losses are currently not deductible by Amir and Francesca because of the tax-basis limitation? c. To what extent does the passive activity loss limitation apply in restricting their deductible losses for the year? Note: For all the requirements, negative amounts should be entered with a minus sign. Leave no answers blank. Enter zero if applicable.
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To determine Amir and Francescas outside basis in their partnership interests and address the taxrel... View the full answer
Related Book For
Taxation Of Individuals And Business Entities 2015
ISBN: 9780077862367
6th Edition
Authors: Brian Spilker, Benjamin Ayers, John Robinson, Edmund Outslay, Ronald Worsham, John Barrick, Connie Weaver
Posted Date:
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