FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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- Ann, Beth, Chris and Dan are equal partners in the ABCD. They have agreed that all items of partnership income, gain, loss and deduction will be split equally between them. In addition, since Ann is expected to be rendering the majority of the services on behalf of the partnership, the partners have agreed that she will receive $3,000 per month in addition to her 25% distributive share. For the year 2020, the partnership had short-term capital loss of $28,000, long-term capital gain of $54,000 and bottom line ordinary income (before considering the additional payments to Ann) of $21,000. What is the amount and character of partnership income and loss that Ann, Beth, Chris and Dan must include from the ABCD partnership on their 2020 income tax returns?arrow_forwardIn the current year, the POD Partnership received revenues of $200,000 and paid the following amounts: $50,000 in rent and utilities, and $20,000 as a distribution to partner Olivia. In addition, the partnership earned $6,000 of long-term capital gains during the year. Partner Donald owns a 50% interest in the partnership. How much income must Donald report for the tax year? a $68,000 ordinary income. b $78,000 ordinary income. $65,000 ordinary income; $3,000 of long-term capital gains. d $75,000 ordinary income; $3,000 of long-term capital gains. e None of the above.arrow_forwardJackie is a 50% partner in The Lunch Box. She is to receive a guaranteed payment of $30,000. If the partnership's ordinary income before deducting the guaranteed payment is $70,000, what is Jackie's distributive share? $15,000 $20,000 $30,000 $35,000arrow_forward
- Mary is a 25% partner. She is to receive 25% of the partnership income, but no less than $10,000. If the net income of the partnership is %50,000, what amount can the partnership deduct as a guaranteed payment to Mary? (a) $0, (b) $2,500, (c) $10,000, (d) $12,500arrow_forwardThis answer is wrong . please give me the right answer.arrow_forwardJenna began the year with a tax basis of $22,000 in her partnership interest. Her share of partnership liabilities consists of $3,000 of recourse liabilities and $12,000 of nonrecourse liabilities at the beginning of the year and $3,000 of recourse liabilities and $14,000 of nonrecourse liabilities at the end of the year. During the year, she was allocated $36,000 of partnership ordinary business loss. Jenna does not materially participate in this partnership, and she has $5,000 of passive income from other sources. b. How much of Jenna’s loss is limited by her at-risk amount?arrow_forward
- Lilac Designs is a partnership with a tax year that ends November 30, 2018. During that year, William, a partner, received $4,000 per month as a guaranteed payment and his share of partnership income after guaranteed payments was $20,000. For December of 2018, William received a guaranteed payment of $10,000. Calculate the amount of income from the partnership that William should report for his tax year ended December 31, 2018.arrow_forwardArtemis is a 30% partner in the CAR Partnership. At the beginning of the tax year, Artemis' basis in the partnership interest was $60,000, including a share of partnership liabilities. During the current year, CAR reported net ordinary income of $40,000. In addition, CAR distributed $5,000 to each of the partners ($15,000 total). At the end of the year, Artemis' share of partnership liabilities increased by $20,000. Artemis' basis in the partnership interest at the end of the year is: a. $87,000. b. $75,000. c. $82,000. d. $120,000. e. $60,000.arrow_forwardOn January 1, 2021 David contributed $25,000 cash and building with a basis of $100,000 and a FMV of $165,000 in exchange for 50% interest in partnership XYZ LLC. XYZ had the following activty for 2021: Ordinary Income: $140,000 Operating expenses: $60,000 Interest Income: $10,000 Nondeductible Expenses: 5,000 What is David's outside basis in XYZ LLC on December 31, 2021? 232,500 170,000 167,500 210,000arrow_forward
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