Problem 14-20 (Algorithmic) (LO. 2, 4, 5) The JM Partnership was formed to acquire land and subdivide it as residential housing lots. On March 1, 2019, Jessica contributed land valued at $630,000 to the partnership in exchange for a 50% interest. She had purchased the land in 2011 for $441,000 and held it for investment purposes (capital asset). The partnership holds the land as inventory. On the same date, Matt contributed land valued at $630,000 that he had purchased in 2009 for $756,000. He became a 50% owner. Matt a real estate developer, but he held this land personally for investment purposes. The partnership holds this land as inventory. In 2020, the partnership sells the land contributed by Jessica for $661,500. In 2021, the partnership sells the real estate contributed by Matt for $598,500. a. What is each partner's initial basis in his or her partnership interest? Jessica's initial basis is $ Matt's initial basis is s b. What is the amount of gain or loss recognized on the sale of the land contributed by Jessica? What is the character of this gain or loss

Problem 14-20 (Algorithmic) (LO. 2, 4, 5) The JM Partnership was formed to acquire land and subdivide it as residential housing lots. On March 1, 2019, Jessica contributed land valued at $630,000 to the partnership in exchange for a 50% interest. She had purchased the land in 2011 for $441,000 and held it for investment purposes (capital asset). The partnership holds the land as inventory. On the same date, Matt contributed land valued at $630,000 that he had purchased in 2009 for $756,000. He became a 50% owner. Matt a real estate developer, but he held this land personally for investment purposes. The partnership holds this land as inventory. In 2020, the partnership sells the land contributed by Jessica for $661,500. In 2021, the partnership sells the real estate contributed by Matt for $598,500. a. What is each partner's initial basis in his or her partnership interest? Jessica's initial basis is $ Matt's initial basis is s b. What is the amount of gain or loss recognized on the sale of the land contributed by Jessica? What is the character of this gain or loss

SWFT Essntl Tax Individ/Bus Entities 2020

23rd Edition

ISBN:9780357391266

Author:Nellen

Publisher:Nellen

Chapter14: Partnerships And Limited Liability Entities

Section: Chapter Questions

Problem 20P

See similar textbooks

Similar questions

Chani contributes equipment to a partnership that she purchased 2 years ago for $10,000. The current book value is $7,500 and the market value is $9,000. At what value should the partnership record the equipment? A. $10,000 B. $9,000 C. $7,500 D. none of the above
14. On March 1, 2020, Apalla and Cabañero formed a partnership with each contributing the following assets: Cabañero P502,500 P 1,172,500 1,256,250 3,768,750 Apalla Cash Machinery and equipment 418,750 Building Furniture and fixtures 167,500 The building is subject to mortgage loan of P1,340,000, which is to be assumed by the partnership. Agreement provides that Apalla and Cabañero share profits and losses 30% and 70%, respectively. On March 1, 2020 the balance in Cabañero's capital account should be: a. P6,197,500 b. P5,259,500 C. P5,108,750 d. P4,857,500 15. The same information in the previous number, except that the mortgage loan is not assumed by the partnership. On March 1, 2020 the balance in Cabañero's capital account should be: a. P6,197,500 b. P5,259,500 C. P5,108,750 d. P4,857,500
1. On May 1, 2019, Gonzaga and Balace formed a partnership and agreed to share profits and losses in the ratio of 3:7, respectively. Gonzaga contributed a parcel of land that cost P10,000. Balace contributed P40,000 cash. The land was sold for P18,000 on May 1,2019, immediately after formation of the partnership. What amount should be recorded in Gonzaga's capital account on formation of the partnership? a. P15,000 b. P17,400 C. P10,000 d. P18,000
Scenario Henry, Hunter, and Harry formed a partnership (Widget Unlimited) on January 1, 2020. Henry and Hunter each contributed $200,000 and Harry transferred a building he had purchased two years earlier to the partnership. The building had a tax basis of $150,000 and was appraised at $300,000. The building was also encumbered with a $100,000 mortgage. The partners plan to use the building to manufacture, distribute, and sell green and purple widgets. Harry will work full time operating the business for which he will receive guaranteed payments (not included in expenses) of $5,000 per month. Henry and Hunter will devote less than twelve days a year to the business. At the end of 2020, Widgets Unlimited had made $6,000 in mortgage principal payments. The partnership agreement specifies that Henry, Hunter, and Harry will share in income/loss in the ratio of 3:3:4. For the first year of operation, the partnership records disclose the following information: Sales revenue $820,000 Cost of…
1. On May 1, 2019, Gonzaga and Balace formed a partnershipandagreed to share profits and losses in the ratio of 3:7, respectively. Gonzaga contributed a parcel of land that cost P10,000. Balace contributed P40,000 cash. The land was sold for P18,000 on May 1,2019, immediately after formation of the partnership. What amount should be recorded in Gonzaga's capital account on formation of the partnership? a. P15,000 b. P17,400 P10,000 C. d. P18,000
The JM Partnership was formed to acquire land and subdivide it as residential housing lots. On March 1, 2019, Jessica contributed land valued at $630,000 to the partnership in exchange for a 50% interest. She had purchased the land in 2011 for $441,000 and held it for investment purposes (capital asset). The partnership holds the land as inventory. On the same date, Matt contributed land valued at $630,000 that he had purchased in 2009 for $756,000. He became a 50% owner. Matt is a real estate developer, but he held this land personally for investment purposes. The partnership holds this land as inventory. In 2020, the partnership sells the land contributed by Jessica for $661,500. In 2021, the partnership sells the real estate contributed by Matt for $598,500.
D FALCO, D LEVI, D ZEKE formed a partnership on April 1, 2020. They agreed that D FALCO will contribute office equipment with a total fair value of P320,000; D LEVI will contribute delivery equipment with a fair value of P640,000; and D ZEKE will contribute cash. If D ZEKE wants a 1/3 interest in the capital and profits, he should contribute cash in the amount of? Your answer