Questions from General Taxation


Q: Rebecca has a $40,000 basis in her partnership interest

Rebecca has a $40,000 basis in her partnership interest when she receives liquidating distributions from the partnership. She receives cash of $24,000 and equipment with a $12,000 basis to the partner...

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Q: Reva gave her daughter a passive activity last year that had an

Reva gave her daughter a passive activity last year that had an adjusted basis of $75,000. The activity had suspended losses of $35,000 and a fair market value of $120,000. In the current year, her da...

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Q: Calvin purchased a 40% partnership interest for $43,000

Calvin purchased a 40% partnership interest for $43,000 in February 2015. His share of partnership income in 2015 was $22,000, in 2016 was $25,000, and in 2017 was $12,000. He made no additional contr...

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Q: Elaine exchanges a van that is used exclusively for business purposes for

Elaine exchanges a van that is used exclusively for business purposes for another van that also is to be used exclusively for business. The adjusted basis for the old van is $18,000, and its FMV is $1...

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Q: During the current year, Joshua worked 1,300 hours as

During the current year, Joshua worked 1,300 hours as a tax consultant and 450 hours as a real estate agent. His one other employee (his wife) worked 300 hours in the real estate business. Joshua earn...

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Q: Donald has two investments in activities that are considered nonrental passive activities

Donald has two investments in activities that are considered nonrental passive activities. He acquired Activity A six years ago, and it was profitable until the current year. He acquired Activity B in...

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Q: Darrell acquired an activity eight years ago. The loss from it

Darrell acquired an activity eight years ago. The loss from it in the current year was $65,000. The activity involves residential rental real estate in which he is an active participant. Calculate Dar...

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Q: Kerry is a partner in the Kerry, Davis, Smith &

Kerry is a partner in the Kerry, Davis, Smith & Jones Partnership. Kerry owned 25% from January 1, 2017 to June 30, 2017, when he bought Jones’s 25% interest. He owned 50% for the rest of the year. Th...

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Q: Wade has a beginning basis in a partnership of $23,

Wade has a beginning basis in a partnership of $23,000. His share of income and expense from the partnership consists of the following amounts: Ordinary income…………………………………$43,000 Guaranteed payment...

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Q: A corporation may make a distribution to its shareholders. Depending on

A corporation may make a distribution to its shareholders. Depending on the circumstances, in the hands of the shareholder, the distribution can be classified as a dividend, a tax-free distribution or...

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