Exercise 21-21 (Algorithmic) (LO. 8) When Padgett Properties LLC was formed, Nova contributed land (value of $219,000 and basis of $54,750) and $109,500 cash, and Oscar contributed cash of $328,500. Both members received a 50% interest in LLC profits and capital. a. How is the land recorded for § 704(b) book capital account purposes? For § 704(b) book capital account purposes, Padgett records the land at $ b. What is Padgett's tax basis in the land? c. If Padgett sells the land several years later for $328,500, how much tax gain will Nova and Oscar report? Nova reports a $ gain and Oscar's gain is $

Exercise 21-21 (Algorithmic) (LO. 8) When Padgett Properties LLC was formed, Nova contributed land (value of $219,000 and basis of $54,750) and $109,500 cash, and Oscar contributed cash of $328,500. Both members received a 50% interest in LLC profits and capital. a. How is the land recorded for § 704(b) book capital account purposes? For § 704(b) book capital account purposes, Padgett records the land at $ b. What is Padgett's tax basis in the land? c. If Padgett sells the land several years later for $328,500, how much tax gain will Nova and Oscar report? Nova reports a $ gain and Oscar's gain is $

SWFT Corp Partner Estates Trusts

42nd Edition

ISBN:9780357161548

Author:Raabe

Publisher:Raabe

Chapter10: Partnerships: Formation, Operation, And Basis

Section: Chapter Questions

Problem 45P

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EXERCISE 6. Journal Entries - Capital share different from capital contribution. On June 1, 2022, Al and Ace formed a partnership. Al contributed cash of P600,000, inventories of P100,000, and furniture and fixtures of P120,000. On the other hand, Ace contributed cash of P520,000, building of P330,000, and land of P200,000. The building was mortgaged for a loan amounting to P500,000 of which 70% had already been paid. The remaining balance would be assumed by the partnership. The partners agreed to share profits and losses equally. Prepare and upload journal entries related to partnership formation, assuming: 1. Each partner would be credited for the full amount of net assets invested 2. Each partner initially should have equal interest in partnership capital. To ensure this, it was agreed that partner with a lower capital balance had to invest additional cash.
Required information Kevan, Jerry, and Dave formed Albee LLC. Jerry and Dave each contributed $245,000 in cash. Kevan contributed the following assets: Kevan: Cash Land* Totals Basis $ 15,000 120,000 Assets: Cash Land Totals Liabilities and capital: Mortgage debt $ 15,000 440,000 $ 135,000 $ 455,000 *Nonrecourse liability secured by the land equals $210,000. Each member received a one-third capital and profits interest in the LLC. Note: Leave no answer blank. Enter zero if applicable. Round to the nearest whole thousand. Capital-Kevan Capital-Jerry Capital-Dave Totals e. Prepare a tax basis balance sheet for Albee LLC showing the tax capital accounts for the members. What is Kevan's share of the LLC's inside basis? Note: Enter any capital account with a debit balance as a negative amount. Albee, LLC Tax Basis Balance Sheet Fair Market Value Tax Basis $ $ 120,000 120,000 0
Required information When High Horizon LLC was formed, Maude contributed the following assets in exchange for a 25 percent capital and profits interest in the LLC: Fair Market Value Basis Maude: Cash Land* $ 20,000 20,000 100,000 360,000 Totals $120,000 $380,000 Nonrecourse debt secured by the land equals $160,000 James, Harold, and Jenny each contributed $220,000 in cash for a 25 percent profits and capital interest. (Leave no answer blank. Enter zero if applicable.) d. What is High Horizon's tax basis in its assets? Tax basis
Required information When High Horizon LLC was formed, Maude contributed the following assets in exchange for a 25 percent capital and profits interest in the LLC: Fair Market Value Basis Maude: Cash Land* $ 20,000 20,000 100,000 360,000 $120,000 $380,000 Totals Nonrecourse debt secured by the land equals $160,000 James, Harold, and Jenny each contributed $220,000 in cash for a 25 percent profits and capital interest. (Leave no answer blank. Enter zero if applicable.) c. What tax basis do James, Harold, and Jenny have in their LLC interests? James Harold Jenny
Required information When High Horizon LLC was formed, Maude contributed the following assets in exchange for a 25 percent capital and profits interest in the LLC: Fair Market Value Basis Maude: Cash Land* $ 20,000 $ 20,000 100,000 360,000 Totals $120,000 $380,000 Nonrecourse debt secured by the land equals $160,000 James, Harold, and Jenny each contributed $220,000 in cash for a 25 percent profits and capital interest. (Leave no answer blank. Enter zero if applicable.) b. What is Maude's tax basis in her LLC interest? Tax basis
Required information Kevan, Jerry, and Dave formed Albee LLC. Jerry and Dave each contributed $245,000 in cash. Kevan contributed the following assets: Kevan: Cash Land* Totals Tax basis Fair Market Value *Nonrecourse liability secured by the land equals $210,000. Each member received a one-third capital and profits interest in the LLC. Note: Leave no answer blank. Enter zero if applicable. Round to the nearest whole thousand. Basis $ 15,000 120,000 $ 15,000 440,000 $ 135,000 $ 455,000 g. If the lender holding the nonrecourse liability secured by Kevan's land required Kevan to guarantee 1/3 of the liability and Jerry to guarantee the remaining 2/3 of the liability when Albee LLC was formed, what are the members' tax bases in their LLC interests? Kevan $285,000 X Answer is complete but not entirely correct. Jerry $ 285,000 $ Dave 285,000
A is the owner of an existing single proprietorship with net assets of 50,000. they agreed torecord the assets and liabilities of A’s business at book value. The book value of A’s businessliability is 60,000. B and C will contribute equally in cash 60% of the total capitalization based onthe capital contribution of A. the capital contribution of B should be A. 37,500B. 75,000C. 82,500D. 165,000
Required Information (The following information applies to the questions displayed below.) Asron, Deonne, snd Keon formed the Blue Bell General Portnership et the beginning of the current yeor. Asron and Deanne each contributed $112,000 end Keon transferred en scre of undeveloped lend to the partnership. The land hod a tax basis of $68,000 and was apprsised st $180,000. The land was olso encumbered with e $68,000 nonrecourse mortgoge for which no one was personally liable. All three pertners agreed to split profits and losses equally. At the end of the first year, Blue Bell made a $6.600 principal payment on the mortgage. For the first yesr of operations, the partnership records disclosed the following information: Sales revenue $ 488, eee Cost of goods sold Operating expenses Long-tern capital gains 51211 gains Charitable contributions 468, 020 43, 020 1, 58e 6ee Municipal bond interest Salary paid as a guaranteed paynent to Dcanne (not included in expenses) 3,0e0 a. Compute the…
FACTS / DATA / GIVEN: . Тахрауer: Receipts/Earnings/balances during the taxable period: Resident citizen Description Winnings from gambling Interest on bank deposits Increase in fair value of lands held for Amount P900,000 20,000 500,000 investment Share in partnership income credited to capital account in the partnership Gross income from profession 150,000 200,000 COMPUTE: Taxable Income O A. 350,000 О в. 870,000 ОС. 1,270,000 O D. 1,770,000
Mai is going to contribute the following assets to a business entity in exchange for an ownership interest. Adjusted Basis FMV Cash $100,000 $100,000 Land and building 60,000 95,000 What are the tax consequences of the contribution to Mai if the business entity is a(n): a. Sole proprietorship? b. General partnership? c. Limited partnership? d. C corporation? e. S corporation?
16. At the beginning of the current year, Peace company provided the following account balances relating to real properties: Land 1 3,000,000 Land 2 5,000,000 Land 3 7,000,000 On same date, the entity revalued land at fair value. The fair values on this date of Land 1, 2 and 3 are 3,500,000, 6,000,000 and 9,000,000, respectively. At the current year end, Land 2 was sold for 7,500,000. What is the revaluation surplus at the beginning and at the end of the current year?
2. What amount of unrealized holding gain should be PROBLEMS Problem 23-1 (IAA) Simple Company reported the following information in relation to land: * The entity purchased land on January 1, 2021 for P500,000 cash. On December 31, 2021, the land has a current replacement cost of P600.000. * On December 31, 2022, the land has a current replacement cost of P750,000. The entity sold the land for P1,000,000 cash on December 31, 2023. On this date, the current replacement cost of the land is P800,000. - What amount of unrealized holding gain should be reported in 2021? a. 600,000 b. 500,000 C. 100,000 d. 0. reported in 2022? a. 250,000 150,000 c. 100,000 d. 0. reported in 2023? a. 300,000 b. 250,000 50,000 d. C. in 2023? a. 500,000 b. 250,000 C. 200,000 d. 150,000 711