As of January 1, 2021, Norman has a basis of $85,000 in his 30% capital interest in
Question:
As of January 1, 2021, Norman has a basis of $85,000 in his 30% capital interest in the Plata Partnership. He and the partnership use the calendar year for tax purposes. The partnership incurs an operating loss of $440,000 for 2021 and a profit of $285,000 for 2022.
a. How much, if any, loss may Norman recognize for 2021?
b. How much income must Norman recognize for 2022?
c. What basis will Norman have in his partnership interest as of January 1, 2022?
d. What basis will Norman have in his partnership interest as of January 1, 2023?
e. What year-end 2021 tax planning would you suggest to ensure that a partner could deduct all of his or her share of any partnership losses?
Step by Step Answer:
Answer a As Norman has basis of 85000 in 30 capital interest Loss to be recognized Interest in partn...View the full answer
South-Western Federal Taxation 2022 Individual Income Taxes
ISBN: 9780357519073
45th Edition
Authors: James C. Young, Annette Nellen, William A. Raabe, Mark Persellin, William H. Hoffman
