Questions from General Taxation

Q: Quenton received a proportionate nonliquidating distribution of $8,000 cash

Quenton received a proportionate nonliquidating distribution of $8,000 cash, inventory with a $5,000 basis and a fair market value of $7,000, and a Section 1231 asset with a $7,000 basis and a fair ma...

Q: Alexandra received a $40,000 cash liquidating distribution for her

Alexandra received a $40,000 cash liquidating distribution for her 25 percent interest in ABC Partnership that had a $62,500 outside basis. Immediately prior to the distribution, the partnership had t...

Q: Walter sells his 40 percent interest in Kennel Kids Playground with a

Walter sells his 40 percent interest in Kennel Kids Playground with a partnership basis interest of $40,000 to George for $60,000. The partnership has the following assets: Cash = $50,000, inventory (...

Q: The Rents-Are-Us Partnership owns a large apartment building

The Rents-Are-Us Partnership owns a large apartment building with a fair market value of $2,100,000, a basis of $1,600,000, and a mortgage encumbering it of $500,000. Kenneth sells his 20 percent inte...

Q: Alpha, Beta, and Gamma form the ABG partnership by transferring

Alpha, Beta, and Gamma form the ABG partnership by transferring the following to the partnership: Alpha………..$10,000 cash and machinery valued at $20,000 with a basis of $15,000. Beta……………………………………………...

Q: Refer to the information in the preceding problem. If the partnership

Refer to the information in the preceding problem. If the partnership sells the land for $27,000 after holding it for three years, what are the tax consequences to Alpha, Beta, and Gamma? From proble...

Q: Explain the difference in recourse and nonrecourse liabilities when distinguishing between general

Explain the difference in recourse and nonrecourse liabilities when distinguishing between general and limited partners. Assume the partnership has $100,000 of recourse liabilities and $60,000 of nonr...

Q: CCC Partnership borrowed $100,000 on a five-year

CCC Partnership borrowed $100,000 on a five-year recourse note from a local bank. It also purchased land for $60,000, putting $10,000 down and signing a qualified nonrecourse loan secured by the land...

Q: Luis and Jennifer formed the JL Partnership as equal partners. Each

Luis and Jennifer formed the JL Partnership as equal partners. Each partner contributed cash and property with a value of $80,000 for partnership operations. As a result of these contributions, Luis h...

Q: In year 1, Sally invested $45,000 for a

In year 1, Sally invested $45,000 for a 10 percent interest in a limited partnership. This is Sally’s only passive investment. The limited partnership has $100,000 of nonrecourse debt. (The debt is no...