Concepts in Federal Taxation 2019 (with Intuit ProConnect Tax Online 2017 and RIA Checkpoint 1 term (6 months) Printed Access Card)
26th Edition
ISBN: 9781337702621
Author: Kevin E. Murphy, Mark Higgins
Publisher: Cengage Learning
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Chapter 2, Problem 27P
To determine
Explain the manner in which taxpayers should account for 3-Star’s results.
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PROBLEM
C and D are partners who share income and losses equally. C has an
outside basis of $5,000 in his partnership interest and D has an outside basis
of $15,000 in her partnership interest.
(a) During the current year the partnership has gross income of
$40,000 and expenses of $60,000. What are the tax results to
C and D?
(b) What are the results to C and D in the succeeding year when
the partnership has $20,000 of net profits?
(c) How might C have alleviated his problem in the first year?
(d) What result in (a), above, if the net $20,000 loss consists of
$15,000 of ordinary loss and $5,000 of long-term capital loss?
(e) What result to S, C's son, in (a), above, if C gives his interest
in the partnership to S on the first day of a year in which the
partnership has profits of $20,000?
1. Seth and Rachel have original investments of $50,000 and $100,000, respectively, in a partnership. The articles of partnership include the following provisions regarding the division of net income: interest on original investments at 15%; salary allowances of $24,000 and $20,000, respectively; and the remainder to be divided equally. How much of the net income of $90,000 is allocated to Seth?
a.$47,750
b.$45,000
c.$42,750
d.$43,250
2. Seth and Beth have original investments of $50,000 and $100,000, respectively, in a partnership. The articles of partnership include the following provisions regarding the division of net income: interest on original investment at 10%; salary allowances of $27,000 and $18,000, respectively; and the remainder to be divided equally. How much of the net income of $42,000 is allocated to Seth?
a.$32,000
b.$23,000
c.$20,000
d.$0
3. Tucker and Titus are partners who share income in the ratio of 3:1 (3/4 to Tucker and 1/4 to Titus). Their capital…
1. Xavier and Yolanda have original investments of $49,500 and $104,400, respectively, in a partnership. The articles of partnership include the following provisions regarding the division of net income: interest on original investment at 20%; salary allowances of $28,700 and $30,900, respectively; and the remainder to be divided equally. How much of the net income of $112,300 is allocated to Xavier?
a.$59,472
b.$28,700
c.$49,560
d.$38,600
2. Xavier and Yolanda have original investments of $50,000 and $100,000, respectively, in a partnership. The articles of partnership include the following provisions regarding the division of net income: interest on original investment at 10%; salary allowances of $38,000 and $28,000, respectively; and the remainder to be divided equally. How much of the net income of $77,000 is allocated to Yolanda?
a.$36,000
b.$38,000
c.$44,000
d.$77,000
3. Tomas and Saturn are partners who share income in the ratio of 3:1 (3/4 to Tomas and 1/4 to Saturn). Their…
Chapter 2 Solutions
Concepts in Federal Taxation 2019 (with Intuit ProConnect Tax Online 2017 and RIA Checkpoint 1 term (6 months) Printed Access Card)
Ch. 2 - Prob. 1DQCh. 2 - Prob. 2DQCh. 2 - What is an arms-length transaction? What is its...Ch. 2 - Prob. 4DQCh. 2 - Prob. 5DQCh. 2 - Prob. 6DQCh. 2 - Prob. 7DQCh. 2 - Prob. 8DQCh. 2 - Prob. 9DQCh. 2 - Prob. 10DQ
Ch. 2 - Prob. 11DQCh. 2 - Prob. 12DQCh. 2 - Prob. 13DQCh. 2 - Prob. 14DQCh. 2 - Prob. 15DQCh. 2 - Prob. 16DQCh. 2 - Prob. 17DQCh. 2 - Prob. 18PCh. 2 - Prob. 19PCh. 2 - Prob. 20PCh. 2 - Prob. 21PCh. 2 - Prob. 22PCh. 2 - Prob. 23PCh. 2 - Prob. 24PCh. 2 - Prob. 25PCh. 2 - Prob. 26PCh. 2 - Prob. 27PCh. 2 - Prob. 28PCh. 2 - Prob. 29PCh. 2 - Prob. 30PCh. 2 - Prob. 31PCh. 2 - Prob. 32PCh. 2 - Prob. 33PCh. 2 - Prob. 34PCh. 2 - Prob. 35PCh. 2 - Prob. 36PCh. 2 - Prob. 37PCh. 2 - Prob. 38PCh. 2 - Prob. 39PCh. 2 - Prob. 40PCh. 2 - Prob. 41PCh. 2 - Prob. 42PCh. 2 - Prob. 43PCh. 2 - Prob. 44PCh. 2 - Prob. 45PCh. 2 - Prob. 46PCh. 2 - Prob. 47PCh. 2 - Prob. 48PCh. 2 - Prob. 49PCh. 2 - Prob. 50PCh. 2 - Prob. 51PCh. 2 - Prob. 52PCh. 2 - Prob. 53PCh. 2 - Prob. 54PCh. 2 - Prob. 55PCh. 2 - Prob. 56PCh. 2 - Prob. 57PCh. 2 - Prob. 58PCh. 2 - Prob. 59PCh. 2 - Prob. 60PCh. 2 - Prob. 61PCh. 2 - Prob. 62PCh. 2 - Prob. 63IIPCh. 2 - Prob. 64IIPCh. 2 - Prob. 65IIPCh. 2 - Jerry and his wife, Joanie, own a successful...Ch. 2 - Prob. 67IIPCh. 2 - Prob. 68IIPCh. 2 - Prob. 69IIPCh. 2 - Prob. 70IIPCh. 2 - Prob. 71IIPCh. 2 - Prob. 79DCCh. 2 - Prob. 80DCCh. 2 - Prob. 81TPC
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- Xavier and Yolanda have original investments of $49,600 and $96,200, respectively, in a partnership. The articles of partnership include the following provisions regarding the division of net income: interest on original investment at 20%; salary allowances of $29,700 and $29,700, respectively; and the remainder to be divided equally. How much of the net income of $112,000 is allocated to Yolanda? O a. $19,240 O b. $48,940 Oc. $60,660 Od. $72,792arrow_forwardXavier and Yolanda have original investments of $54,600 and $94,200, respectively, in a partnership. The articles of partnership include the following provisions regarding the division of net income: interest on original investment at 20%; salary allowances of $29,100 and $30,900, respectively; and the remainder to be divided equally. How much of the net income of $118,100 is allocated to Yolanda? a.$63,910 b.$49,740 c.$18,840 d.$76,692arrow_forwardXavier and Yolanda have original investments of $47,500 and $90,200, respectively, in a partnership. The articles of partnership include the following provisions regarding the division of net income: interest on original investment at 20%; salary allowances of $27,600 and $29,900, respectively; and the remainder to be divided equally. How much of the net income of $115,900 is allocated to Yolanda? a. $18,040 b. $63,370 c. $76,044 d. $47,940arrow_forward
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