In the XY Partnership, X is the general partner with a 20% interest and Y is the limited partner with an 80% interest. How is partner Y’s basis affected if Y guarantees a partnership nonrecourse loan of $50,000 to a bank?
Y gets a $10,000 increase in basis.
Y gets a $40,000 increase in basis.
Y gets a $50,000 increase in basis.
Y gets no increase in basis.
Y gets a $50,000 increase in basis. since he personally guarantees it.
XY Partnership has the following assets and liabilities at year-end. The book basis and the ta basis are the same amount Assets
Machine: Basis: $10,000 Value: $5,000
Building: Basis: $80,000 Value: $82,000
Note 1: Basis: $ 3,000 Value: $ 3,000
Note 2: Basis: $90,000 Value: $90,000
Note 1 is a nonrecourse note attached to the machine; Note 2 is a nonrecourse note attached to the building. What is the amount of the partnership’s minimum gain?
C is an equal partner in ABC Partnership. The partnership has made no election under Section 754. C sells her interest to E for its fair market value of $99,000 when her basis was $88,000. At year-end, the assets of the partnership are as follows:
Cash Basis: $22,500 Market: $22,500
Accounts receivable Basis: $45,000 Market: $45,000
Inventory Basis: $90,000 Market: $94,500
Land Basis: $90,000 Market: $180,000
Total Basis: $247,500 Market: $342,000Assuming that C’s outside basis equaled the partnership’s inside basis at the time of the sale, what is E’s basis in the inventory at year end?
Unless an election under section 754 is made or is in effect for the year of sale, no adjustment is made to the partnership’s adjusted basis of its assets (“inside basis”), §743(a), unless there is a mandatory negative adjustment triggered by a substantial built-in loss in the partnership’s assets, see §743(d).
Which of the following will not allow a special allocation to be considered as substantial?The special allocation is considered to be pro rata distribution.
The special allocation is not considered to be a shifting or transitory allocation.
The special allocation is provided for in the partnership agreement.
The special allocation violates the overall tax effect rule.
X and Y are equal partners in the XY Partnership and share profits and losses accordingly. At the end of 20X1, the partnerships capital accounts reflect the following numbers due to a special allocation of depreciation:
Capital X. Capital Y
($20,000) $60,000All the assets are sold for $40,000. How will the liquidation affect X if the special allocation is to be respected?X contributes $20,000 and receives $30,000.
X contributes $20,000 and receives nothing.
X contributes nothing.
X receives nothing.
In this case, the liquidation requires that X makes a contribution to eliminate the deficit in X’s capital account. The proceeds of the liquidation are then distributed according to the distribution of the positive capital accounts. Since X’s capital account would have a 0 balance, X receives nothing.
Thus, X contributes $20,000 and receives nothing.
On March 1, 20X0, M retired from the MNO partnership, a calendar-year partnership. M continued to receive retirement payments until February 28, 20X1, when his entire partnership interest was liquidated. For tax purposes. When did M cease to be regarded as a Partner?March 1, 20X0
December 30, 20X0
December 31, 20X1
February 28, 20X1
The retiring partner is regarded as a partner until his/her interest is completely liquidated. In this case, that occurs on February 28, 20X1.
Which of the following is not an example of a partnership where capital is a material income-producing factor?Five individuals open a hardware store as a partnership.
Four individuals form a child care service partnership.
Three college students form a resale bookstore.
Two individuals form a steel company.
B. Four individuals form a child care service partnership
This is because a child care service consists of fees for services, whereas the other three examples have heavy investments of capital in merchandise and/or material offered for sale.
Which of the following statements is false concerning the requirements of the atom bomb test (constructive liquidation) of Regulation Section 1.752-1?Limited partners, not general partners, are deemed to have their interests liquidated.
Partners must restore negative capital accounts after the constructive liquidation.
Partnership assets are considered to be worthless and sold for their worthless value.
Partnership liabilities are deemed to be due and payable.
Fda bag contains five batteries, all of which are the same size and are equally likely to be selected. Each battery is a different brand. If you select four batteries at random, use the counting principle to determine how many points will be in the sample space if the batteries are selected
Since the exercise says to use counting principle i think the order is important and the answer is 120
But if you say that 120 is wrong maybe the right result (if order is not important) is 5C4 = 5
If Partner A receives retirement payments from a partnership interest of $10,000 per year until the price of oil drops below $20 per barrel, which of the following statements is true in determining partner A’s gain or loss?
The payments are treated as capital gains.
The payments are treated as ordinary income until A’s basis is fully recovered.
The payments are treated as ordinary income.
The payments are treated as property payments until A’s basis is recovered.
The payments are treated as ordinary income. Since it’s determined without regard to partnership income
IRC Section 736 applies to which of the following situations?An involuntary termination of a partnership
The death of a partner
The distribution of a partnership property
The reduction of a partner’s interest
X owns 60% and his friend, F, owns 40% of a partnership. After transferring 20% of the capital and profits interest to his daughter, D, X’s interest drops down to 40% of the partnership. After guaranteed payments, partnership profits of $50,000 we’re allocated as follows: $20,000 to X, $20,000 to F, and $10,000 to D. X performs services for the partnership and receives a guaranteed payment of $10,000; capital is not an income producing factor. Which of the following is X’ s includible income for the year?$20,000
In maintaining a capital account on a book basis, which of the following statements is the most true? A capital account is decreased by nondeductible expenditures.
A capital account is increased for minimum gain.
Liabilities must be reflected in the capital account.
Liabilities must be reflected in the capital account.
Property contributions must be reflected at basis.
Partner X is one-fourth partner in a partnership with $12,000 of accounts receivable with a zero basis, capital assets from the assets of $16,000 with an $8,000 basis, and no liabilities. If partner X receives $7,000 of capital assets from the partnership in exchange for his entire interest, which of the following is deemed to occur?
Partner X must recognize ordinary income of $3,000.
Partner X must recognize a capital gain of $2,000.
Partner X must recognize a capital gain of $5,000.
Partner X need not recognize any gain or loss.
This year, I place 100 dollars into an account with a zero dollar balance, and plan to continue on contributing annually for n amount of time.Part (A)
Every two years, I increase the amount I place in by $100. In the first 8 years (n=8) my contribution schedule looks like this:###-##-####200 300 300 400 400Please construct a formula for the balance/future value/total amount (y) in year (n). Please show your work and explain the variables and operations used to construct the formula in step by step order.Part (B)
Every two years, instead of increasing the mount by $100, I double the amount I contribute. In the first 8 years (n=8) my contribution schedule looks like this:
100 100 200 200 400 400 800 800Please construct a formula for the balance/future value/total amount (y) in year (n). Please show your work and explain the variables and operations used to construct the formula in step by step order.
In part A) we used the Formula for the sum of the first integers from 1 to n is n(n+1)/2 (Gauss sum) is a classic result, I do not think you need to justify that