Questions from Federal Taxation

Q: At the beginning of year 1, Ed and Fran each contributed

At the beginning of year 1, Ed and Fran each contributed $1,000 cash to EF Partnership as equal partners. The partnership immediately borrowed $98,000 on a nonrecourse basis and used the contributed c...

Q: Susan, Steve, and Sandy own 15%, 35%, and

Susan, Steve, and Sandy own 15%, 35%, and 50%, respectively, in the SSS Partnership. Susan sells securities for their $40,000 FMV to the partnership. What are the tax implications of the following ind...

Q: Kara owns 35% of the KLM Partnership and 45% of

Kara owns 35% of the KLM Partnership and 45% of the KTV Partnership. Lynn owns 20% of KLM and 3% of KTV. Maura, Kara’s daughter, owns 15% of KTV. No other partners own an interest in both partnerships...

Q: Allen and Bob are equal partners in the AB Partnership. Bob

Allen and Bob are equal partners in the AB Partnership. Bob manages the business and receives a guaranteed payment. What amount and character of income will Allen and Bob report in each of the followi...

Q: Pam and Susan own the PS Partnership. Pam takes care of

Pam and Susan own the PS Partnership. Pam takes care of daily operations and receives a guaranteed payment for her efforts. What amount and character of income will each partner report in each of the...

Q: Dad gives Son a 20% capital and profits interest in the

Dad gives Son a 20% capital and profits interest in the Family Partnership. Dad holds a 70% interest, and Fred, an unrelated individual, holds a 10% interest. Dad and Fred work in the partnership, but...

Q: Assume the same facts as in Problem C:2-51

Assume the same facts as in Problem C:2-51 except that Lois gave the Water stock to her daughter, Sue, six months after she received it. The stock had a $120,000 FMV when Lois acquired it and when she...

Q: Caitlin and Wally formed the C & W Partnership on September 20

Caitlin and Wally formed the C & W Partnership on September 20, 2017. Caitlin contributed cash of $195,000, and Wally contributed office furniture with a FMV of $66,000. He bought the furniture for $6...

Q: Your clients, Lisa and Matthew, plan to form Lima General

Your clients, Lisa and Matthew, plan to form Lima General Partnership. Lisa will contribute $50,000 cash to Lima for a 50% interest in capital and profits. Matthew will contribute land having a $35,00...

Q: Almost two years ago, the DEF Partnership was formed when Demetrius

Almost two years ago, the DEF Partnership was formed when Demetrius, Ebony, and Farouk each contributed $100,000 in cash. They are equal general partners in the real estate partnership, which has a De...