Questions from General Taxation

Q: Debbie and Alan open a web-based bookstore together. They

Debbie and Alan open a web-based bookstore together. They have been friends for so long that they start their business on a handshake after discussing how they will share both work and profits or loss...

Q: Hal, Steve, and Lew form a partnership to operate a

Hal, Steve, and Lew form a partnership to operate a grocery store. For each of the following contributions by the partners, indicate (1) the amount of income or gain recognized, if any, by the partne...

Q: Nan contributes property with an adjusted basis of $60,000

Nan contributes property with an adjusted basis of $60,000 to a partnership. The property has a fair market value of $75,000 on the date of the contribution. What is the partnership’s basis in the pro...

Q: Elaine’s original basis in the Hornbeam Partnership was $30,000

Elaine’s original basis in the Hornbeam Partnership was $30,000. Her share of the taxable income from the partnership since she purchased the interest has been $90,000, and Elaine has received $80,000...

Q: Larry and Jessica form the L&J Partnership. Larry contributes

Larry and Jessica form the L&J Partnership. Larry contributes property with an adjusted basis of $70,000, a fair market value of $200,000, and subject to a liability of $80,000 in exchange for a 40 pe...

Q: Mike purchases a heavy-duty truck (5-year class

Mike purchases a heavy-duty truck (5-year class recovery property) for his delivery service on April 30, 2016. The truck is not considered a passenger automobile for purposes of the listed property an...

Q: Jay contributes property with a fair market value of $16,

Jay contributes property with a fair market value of $16,000 and an adjusted basis of $5,000 to a partnership in exchange for an 8 percent partnership interest. a. Calculate the amount of gain recogni...

Q: Wilson has a 40 percent interest in the assets and income of

Wilson has a 40 percent interest in the assets and income of the CC&W Partnership, and the basis in his partnership interest is $45,000 at the beginning of 2016. During 2016, the partnership’s net los...

Q: Go to the IRS website (www.irs.gov)

Go to the IRS website (www.irs.gov) and print pages 1 and 2 of Schedule K-1 (Form 1065), Partner’s Share of Income, Deductions, Credits, etc. Review the different elements of income which must be pass...

Q: L&J Interests is a partnership with two equal partners,

L&J Interests is a partnership with two equal partners, Linda and Joanne. The partnership has income of $75,000 for the year before guaranteed payments. Guaranteed payments of $45,000 are paid to Lind...