Q: Aiden has a 35% capital interest in the Oro Partnership and
Aiden has a 35% capital interest in the Oro Partnership and is entitled to a yearly guaranteed payment of $40,000. As of January 1, 2021, Aiden’s basis in the partnership interest is $87,000. During t...
See AnswerQ: As of January 1, 2021, Norman has a basis of
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 oper...
See AnswerQ: Del Mar Corporation (EIN 33-1234567) was formed and
Del Mar Corporation (EIN 33-1234567) was formed and began operations on January 1, 2021. The corporate address is 463 E. Pershing Blvd. Cheyenne, WY 82001. Del Mar uses the accrual basis of accountin...
See AnswerQ: In two unrelated transactions, Laura exchanges property that qualifies for like
In two unrelated transactions, Laura exchanges property that qualifies for like-kind exchange treatment. In the first exchange, Laura gives up land purchased in May 2019 (adjusted basis of $20,000; fa...
See AnswerQ: Suni owns land (adjusted basis of $90,000;
Suni owns land (adjusted basis of $90,000; fair market value of $125,000) that she uses in her business. She exchanges it for another parcel of land (worth $100,000) and stock (worth $25,000). Determi...
See AnswerQ: Hilde purchased all of the rights to a patent on a new
Hilde purchased all of the rights to a patent on a new garden tool developed by a friend of hers who was an amateur inventor. The inventor had obtained the patent rights, set up a manufacturing compan...
See AnswerQ: Melaney has had a bad year with her investments. She lent
Melaney has had a bad year with her investments. She lent a friend $8,000; the friend did not repay the loan when it was due and then declared bankruptcy. The loan is totally uncollectible. Melaney al...
See AnswerQ: Benny purchased $400,000 of Peach Corporation face value bonds
Benny purchased $400,000 of Peach Corporation face value bonds for $320,000 on November 13, 2020. The bonds had been issued with $80,000 of original issue discount because Peach was in financial diffi...
See AnswerQ: Tom Howard and Frank Pérez are good friends (and former college
Tom Howard and Frank Pérez are good friends (and former college roommates). Each owns investment property in the other’s hometown (Tom lives in Kalamazoo, MI; Frank lives in Austin, TX). To make their...
See AnswerQ: Determine the realized, recognized, and postponed gain or loss and
Determine the realized, recognized, and postponed gain or loss and the new basis for each of the following like-kind exchanges. g. Create a Microsoft Excel spreadsheet that—by enteri...
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