In the extra credit assignment for partnership formations, the basic fact pattern is as follows: Mary...
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In the extra credit assignment for partnership formations, the basic fact pattern is as follows: Mary and Todd form the MT Partnership, with a transfer of the following properties: Mary $500,000 cash $500,000 FMV property $300,000 tax basis Todd Both Mary and Todd receive a 50% interest in the partnership. They have an agreement that allocates all profits and losses 50% to each member. They also have language in their partnership agreement that satisfies the alternate test for economic effect. REQUIRED: 1. Show the book (704b) and tax basis capital account entries for both Mary and Todd at formation of the partnership. 2. Assume that Todd's property is later sold for $700,000. No depreciation deductions were claimed. Show the allocation of the book and tax gain from this sale, and explain which one will be reflected on the tax return of the partnership. In the extra credit assignment for partnership formations, the basic fact pattern is as follows: Mary and Todd form the MT Partnership, with a transfer of the following properties: Mary $500,000 cash $500,000 FMV property $300,000 tax basis Todd Both Mary and Todd receive a 50% interest in the partnership. They have an agreement that allocates all profits and losses 50% to each member. They also have language in their partnership agreement that satisfies the alternate test for economic effect. REQUIRED: 1. Show the book (704b) and tax basis capital account entries for both Mary and Todd at formation of the partnership. 2. Assume that Todd's property is later sold for $700,000. No depreciation deductions were claimed. Show the allocation of the book and tax gain from this sale, and explain which one will be reflected on the tax return of the partnership.
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Ans1 Balance Sheet After Partnership Assets Tax Basis 704b Book Basis Capital Accounts Tax Basis 704... View the full answer
Related Book For
Canadian Income Taxation planning and decision making
ISBN: 9781259094330
17th edition 2014-2015 version
Authors: Joan Kitunen, William Buckwold
Posted Date:
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