*********** Certainly! Here are two more scenarios: Scenario 26: Thomas is a 15% partner in a partnership. Thepartnership incurred a net loss of $200,000 for the year, and Thomas's share of the loss is $30,000. Thomas's initial basisin the partnership was $50,000. He received a $10,000 cash distribution from the partnership. Thomas's other incomeincludes: Wages: $85,000 Interest and Dividend Income: $2,000 Itemized Deductions: $20,000 Allowable deduction forself-employment tax: None How much of the partnership loss can Thomas deduct considering his basis, the at-risklimitations, and passive activity loss rules? How does the distribution affect his basis? Calculate Thomas's Adjusted GrossIncome (AGI). What is Thomas's Taxable Income? What is Thomas's Total Tax Liability?

Partnership basis embodies a partner's financial stake in the partnership, incorporating initial…

self-employment tax: None How much of the partnership loss can Thomas deduct considering his basis, the at-risk limitations, and passive activity loss rules? How does the distribution affect his basis? Calculate Thomas's Adjusted Gross Income (AGI). What is Thomas's Taxable Income? What is Thomas's Total Tax Liability?

self-employment tax: None How much of the partnership loss can Thomas deduct considering his basis, the at-risk limitations, and passive activity loss rules? How does the distribution affect his basis? Calculate Thomas's Adjusted Gross Income (AGI). What is Thomas's Taxable Income? What is Thomas's Total Tax Liability?

Individual Income Taxes

43rd Edition

ISBN:9780357109731

Author:Hoffman

Publisher:Hoffman

Chapter11: Investor Losses

Section: Chapter Questions

Problem 5CPA: Sally recently invested 10,000 (tax basis) in a limited partnership interest. Her at-risk amount is...

See similar textbooks

Similar questions

Sally recently invested 10,000 (tax basis) in a limited partnership interest. Her at-risk amount is also 10,000. The partnership lost 6,000 this year, and Sallys share of the loss is 2,000. Sally has 40,000 in wage income and 2,000 of dividend income. In addition, Sallys share of income from a different limited partnership is 1,000. Sally does not meet the tests for material participation for either of her partnership interests. How much of Sallys 2,000 loss from the limited partnership can she deduct this year? a. 2,000 b. 0 c. 1,000 because she has 2,000 of dividend income d. 1,000 because she has 1,000 income from another limited partnership
How much was the bonus debited or credited in partner Bruce's capital account? * Bruce, Parker and May formed a partnership. Their capital balances showed the following: Bruce, Capital- P252,000; Parker, Capital- P126,000; May, Capital- P42,000. Their profit and loss ratio are 6:3:1. The partners decide to sell 20 percent of their interest to Violet for a total payment of P120,000. Violet will pay the money directly to the other partners.
********* Scenario 53: Thomas is a 25% partner in a partnership. The partnership incurred a net loss of $220,000 for the year, and Thomas's share of the loss is $55,000. Thomas's initial basis in the partnership was $85,000. He received a $30,000 cash distribution from the partnership. Thomas's other income includes: Wages: $95,000 Interest and Dividend Income: $3,500 Itemized Deductions: $ 28,000 Allowable deduction for self-employment tax: None How much of the partnership loss can Thomas deduct considering his basis, the at-risk limitations, and passive activity loss rules? How does the distribution affect his basis? Calculate Thomas's Adjusted Gross Income (AGI). What is Thomas's Taxable Income? What is Thomas's Total Tax Liability?
A and B formed a partnership. A and B agreed to share the partnership's profit as follows: A to receive P10,000 salary per month and 5% bonus before salary and bonus • Partners receive P50,000 each for the interest on their average capital. Remainder is to be divided equally ● If A's share in the partnership loss was P80,000 for the year. Compute the partnership income (loss). Encode as a negative amount if the answer is a loss.-
. At the end of last year, Catherine, a 30% partner in the KLM partnership, had an outside basis of $50,000 in her partnership interest. She sold her partnership interest for $90,000. The partnership had $100,000 of unrealized receivables, and no debt. Calculate the amount and character of Catherine’s recognized gain or loss.
Bruce, Parker and May formed a partnership. Their capital balances showed the following. Bruce Capital P252,000; Parker, Capital-P126,000; May, Capital-P42,000. Their profit and loss ratio are 6:3:1. The partners decide to sell 20 percent of their interest to Violet for a total payment of P120,000 Violet will pay the money directly to the other partners. How much was the bonus debited or credited in partner Bruce’s capital account?
The Distance Plus partnership has the following capital balances at the beginning of the current year along with respective profit and loss percentages: Tiger (40%) Phil (20%) Ernie (40%) $ 95,000 65,000 80,000 Each of the following questions should be viewed independently. a. If Sergio invests $120,000 in cash in the business for a 30 percent interest, what journal entry is recorded? Assume that the bonus method is used. b. If Sergio invests $90,000 in cash in the business for a 30 percent interest, what journal entry is recorded? Assume that the bonus method is used. c. If Sergio invests $108,000 in cash in the business for a 30 percent interest, what journal entry is recorded? Assume that the goodwill method is used.
The Distance Plus partnership has the following capital balances at the beginning of the current year along with respective profit and loss percentages: $ 105,000 Tiger (50%) Phil (20%) Ernie (30%) 75,000 90,000 Each of the following questions should be viewed independently. a. If Sergio invests $100,000 in cash in the business for a 20 percent interest, what journal entry is recorded? Assume that the bonus method is used. b. If Sergio invests $60,000 in cash in the business for a 20 percent interest, what journal entry is recorded? Assume that the bonus method is used. c. If Sergio invests $70,000 in cash in the business for a 20 percent interest, what journal entry is recorded? Assume that the goodwill method is used. Complete this question by entering your answers in the tabs below. Required A Required B Required C If Sergio invests $100,000 in cash in the business for a 20 percent interest, what journal entry is recorded? Assume that the bonus method is used. (If no entry is…
5. only. Max and Kenneth are partners in an eatery business with balances of P250,000 and P150,000 respectively. Partnership agreement calls for: 12% interest on capital, P6,000 monthly salary for Max as managing partner, remaining profit to be divided equally by the two partners. You are given the following independent situations: a) Result of a one year operation is a net profit of P170,000 after tax. Result of a one year operation was a net loss of P240,000. b) c) Result of a one year operation was a net profit of P120,000 before tax of 20%. d) Result of a six-month operation was a net profit of P110,250 before tax of 20%. e) Result of a three-month operation was a net loss of P75,000. Direction: Record the distribution based on the aforementioned situations supported by profit/loss allocation table.
1. Say, Alittle and Prayer are partners in a furniture company. following profit and loss distributions; Their partnership agreement provides for the > Say, Alittle and Prayer are to receive salaries of P40,000, P36,000, and P13,650, respectively. Say is to receive a bonus equal to 10% of income before the bonus. Each partner is to receive 10% interest on the weighted average capital balance. Withdrawals are considered to be reduction of capital for purposes of interest calculations. > Any remaining profits of losses are to be divided equally among the partners. Capital balance information for 2006 is as follows: Alittle 6,000 Say 10,000 1,000 2,000 1,000 Prayer 40,000 2,000 15,000 Jan. 1, 2006 Withdrawal 4/1/06 Investment 7/1/06 Withdrawal 10/1/06 4,000 2,000 Prepare distribution of profit or loss table showing the required profit that will allow Say to withdraw P65,000 from said profit. 2. Ashe Company was organized on January 1, 2010, with authorized capital of 100,000 shares of…
The Distance Plus partnership has the following capital balances at the beginning of the current year along with respective profit and loss percentages: Tiger (40%) $ 125,000 Phil (20%) 95,000 Ernie (40%) 110,000 Each of the following questions should be viewed independently. If Sergio invests $150,000 in cash in the business for a 30 percent interest, what journal entry is recorded? Assume that the bonus method is used. If Sergio invests $140,000 in cash in the business for a 30 percent interest, what journal entry is recorded? Assume that the bonus method is used. If Sergio invests $150,000 in cash in the business for a 30 percent interest, what journal entry is recorded? Assume that the goodwill method is used.
Rachel, Monica and Phoebe are partners with capital balances of P896,000, P3,120,000 and 3,160,( respectively, sharing profits and losses in the ration 3:2:1. Janice is admitted as a new partner bringing with her expertise and is to invest cash for a 25% interest in the partnership, which includes a credit of P840,000 bonus upon his admission. 1.How much cash should Janice contribute? A.1,560,000 B. 1,800,000 C. 2,540,000 D. 672,000