Questions from Federal Taxation

Q: An existing partner wants to contribute property having a basis less than

An existing partner wants to contribute property having a basis less than its FMV for an additional interest in a partnership. a. Should he contribute the property to the partnership? b. What are hi...

Q: Kobe transfers $500,000 in cash to newly formed Bryant

Kobe transfers $500,000 in cash to newly formed Bryant Corporation for 100% of Bryant’s stock. In the first year of operations, Bryant’s taxable income before any payments to Kobe is $120,000. What to...

Q: Jane contributes valuable property to a partnership in exchange for a general

Jane contributes valuable property to a partnership in exchange for a general partnership interest. The partnership also assumes the recourse mortgage Jane incurred when she purchased the property two...

Q: The BW Partnership reported the following current year earnings: $30

The BW Partnership reported the following current year earnings: $30,000 interest from tax exempt bonds, $50,000 long-term capital gain, and $100,000 net income from operations. Bob saw these numbers...

Q: Can a recourse debt of a partnership increase the basis of a

Can a recourse debt of a partnership increase the basis of a limited partner’s partnership interest? Explain.

Q: Is the Sec. 704(d) loss limitation rule more

Is the Sec. 704(d) loss limitation rule more or less restrictive than the at-risk rules? Explain.

Q: Jeff, a 10% limited partner in the recently formed JRS

Jeff, a 10% limited partner in the recently formed JRS Partnership, expects to have losses from the partnership for several more years. He is considering purchasing an interest in a profitable general...

Q: Helen, a 55% partner in the ABC Partnership, owns

Helen, a 55% partner in the ABC Partnership, owns land (a capital asset) having a $20,000 basis and a $25,000 FMV. She plans to transfer the land to the ABC Partnership, which will subdivide the land...

Q: Suzanne and Laura form a partnership to market local crafts. In

Suzanne and Laura form a partnership to market local crafts. In April, the two women spent $1,600 searching for a retail outlet, $1,200 to have a partnership agreement drawn up, and $2,000 to have an...

Q: Cara, a CPA, established an accounting system for the ABC

Cara, a CPA, established an accounting system for the ABC Partnership and, in return for her services, received a 10% profits interest (but no capital interest) in the partnership. Her usual fee for t...