Mick, Tommy, and Nikki each contributed $500 cash to the MC partnership. The partnership used the cash to purchase land for $1,000; equipment for $300; and a vehicle for $200.  Subsequently, when the land is valued $2,500, the equipment is valued at $900, and the vehicle is valued at $200, MC plans to admit Vince to the partnership as 25% partner.  Vince will make a cash contribution.  Assume MC elects to revalue its assets in accordance with the section 704(b) regulations.  How will the book gain be allocated?  How much cash should Vince contribute?  Update the partnership’s book following Vince’s contribution of cash and the revaluation.  *Note – when answering this question assume that neither the equipment nor the vehicle have been subject to depreciation at the time Vince becomes a partner*

Sue and Andrew form SA general partnership. Each person receives an equal interest in the newly created partnership. Sue contributes $16,000 of cash and land with an FMV of $61,000. Her basis in the land is $26,000. Andrew contributes equipment with an FMV of $18,000 and a building with an FMV of $39,000. His basis in the equipment is $14,000, and his basis in the building is $26,000. How much gain must the SA general partnership recognize on the transfer of these assets from Sue and Andrew?

Ivana, Eric, and Jerry form a partnership to develop land into commercial offices and rent them for a profit. Ivana contributes land with a fair market value of $1,200,000 and a $600,000 basis. Eric and Jerry each contribute $600,000 of cash. (a) Assume that Ivana is a 50% partner and that Eric and Jerry each are 25% partners. If the partnership earns $400,000 from operations in its first year and distributes the cash proportionately, does Ivana recognize any gain? (b) Pursuant to the written partnership agreement, the partnership pays Ivana $100,000 a year for six years, regardless of its income, as a guaranteed payment for capital. Alternatively, pursuant to the partnership agreement, the partnership allocates and distributes the first $100,000 of income exclusively to Ivana for six years. Assume that the highest applicable federal rate for all years equals 8%. Does Ivana recognize any gain?

Jerry and Sherry own and operate a partnership. Jerry’s capital balance is $50,000 and Sherry’s is $55,000. Jerry and Sherry decided to admit a new partner, Allison, to their partnership. By the terms of their partnership agreement, Jerry and Sherry share income/loss equally.   Allison intends to contribute $40,000 cash to receive a twenty-five percent interest in the partnership   Required:   a. Revalue the partnership assets b. Determine the total equity of the partnership after the new partner is admitted c. Determine the new partner share of the total equity d. Determine the bonus resulting from Allison’s equity of her contribution e. Make journal entries to record Allison’s admission to the partnership. Please solve sub-part e. Show Your Work:

Jerry and Sherry own and operate a partnership. Jerry’s capital balance is $50,000 and Sherry’s is $55,000. Jerry and Sherry decided to admit a new partner, Allison, to their partnership. By the terms of their partnership agreement, Jerry and Sherry share income/loss equally.   Allison intends to contribute $40,000 cash to receive a twenty-five percent interest in the partnership   Required:   a. Revalue the partnership assets b. Determine the total equity of the partnership after the new partner is admitted c. Determine the new partner share of the total equity d. Determine the bonus resulting from Allison’s equity of her contribution e. Make journal entries to record Allison’s admission to the partnership.

Steve contributed land, inventory, and 140,000 cash to a partnership. The land has a book value of 325,000 and a market value of 675,000. The inventory has a book value of 300,000 and a market value of 255,000. The partnership also assumed a 175,000 note payable owed by Steve that was used to purchase the land. Kai agreed to put up cash equivalent to Steve's net investment. How much is the cash investment of Kai to the partnership?

Laurel and Hardy form a 50/50 partnership (HaHa Partners) in 2018.  Laurel contributes land with a fair market value of $700,000 and an adjusted basis of $500,000.  The land is subject to a $250,000 mortgage which the partnership assumes.  Hardy contributes $450,000 of cash. Determine Laurel’s outside basis and Hardy’s outside basis after each of them has contributed their property and cash to form the partnership.

Jerry and Sherry own and operate a partnership. Jerry's capital balance is $50,000 and Sherry's is $55,000. Jerry and Sherry decided to admit a new partner, Allison, to their partnership. By the terms of their partnership agreement, Jerry and Sherry share income/ loss equally, Allison intends to contribute $40,000 to receive a Twenty-five percent interest in the partnership. Required: a. Revalue the partnership assets b. Determine the total equity of the partnership after the new partner is admitted c. Determine the new partner's share of the total equity d. Determine the bonus resulting from Allison's equity of her contribution e. Make journal entries to rccord Allison's admission to the partnership

Zach contributed land with an FMV of $44,000 and a basis of $23,500 to a partnership on April 5, 2014. On June 6, 2020, the partnership distributed the land to Art, a partner in the same partnership. At distribution, the land had an FMV of $48,950. Assume that both are equal partners in the partnership. Required: a. What is the effect of the distribution to Zach, if any? b. What is the effect of the distribution to Art? a. b.

Hannah, Rose, and Rachael form an equal general partnership. Hannah and Rose each contribute $40,000 cash.  Rachael contributes land with a basis of $48,000 and a fair market value of $100,000, subject to a nonrecourse liability of $60,000.    Under section 752, assume that the liability will be allocated to the partners as follows: Hannah ($16,000); Rose ($16,000); and Rachael ($28,000). Prepare the partnership’s books following formation.   *hint* - a partner’s tax capital account can be negative   Assets Book Tax Liabilities Book Tax                   Capital Book Tax                                       Determine each partner’s outside basis in the partnership.