T2 would like to purchase a partnership interest from T1. At the time of the purchase, T1's outside basis in the partnership interest is $20,000, which includes $3,000 of liabilities of the partnership allocable to T1. Determine T2's initial outside basis in the partnership interest if he acquires it from T1 for $27,500 in cash. Type your answer...

T2 would like to purchase a partnership interest from T1. At the time of the purchase, T1's outside basis in the partnership interest is $20,000, which includes $3,000 of liabilities of the partnership allocable to T1. Determine T2's initial outside basis in the partnership interest if he acquires it from T1 for $27,500 in cash. Type your answer...

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 22P

See similar textbooks

Similar questions

Ma1. Nina and Sue form an equal partnership during the current year. They agree to share profits and losses equally. Nina contributes cash of $100,000 and Sue contributes property (A/B of $80,000, FMV of $100,000) subject to a recourse debt of $50,000 which the partnership will assume. a. Is any gain or loss recognized on the formation of the partnership? b. What basis do the partners have in their partnership interest after the formation?
Assume that the assets and liabilities are fairly valued on the balance Sheet and the partnership decides to admit Mac as a new partner, with a 20% interest. No goodwill or bonus is to be recorded. How much Mac should contribute in cash or other assets? (Please Refer to the Image Uploaded)
The DJ Partnership has two partners, Dawn and Jack. Each partner's basis in his or her partnership interest is $14,000 before any distribution. The partnership distributes $23,000 cash to Dawn and $5,000 cash to Jack. Read the requirements. Requirement a. Assuming a current distribution, determine for each partner (1) gain or loss recognized and (2) basis in the partnership interest after the distribution. (Complete all input fields. Enter a $0 for any zero balances. Enter a loss with a minus sign or parentheses.) Dawn Jack (1) Gain (loss) recognized Requirements (2) Basis in the partnership interest after the distribution a. Assuming a current distribution, determine for each partner (1) gain or loss recognized and (2) basis in the partnership interest after the distribution. b. Assuming a liquidating distribution, determine each partner's gain or loss recognized.
5. Assume that a partnership had assets with a book value of P240,000 and a market value of P195,000, outside liabilities of P70,000, loans payable to partner Able of P20,000, and capital balances for partners Able, Baker, and Chapman of P70,000, P30,000, and P50,000. How much would Able receive upon liquidation of the partnership assuming profits and losses are allocated equally? a. P70,000 b. P90,000 C. P75,000 d. P55,000
H has beginning basis in his partnership interest of $500. During the year H is allocated $100 of partnership income, $500 of partnership losses, and receives a cash distribution of $400. What amount of distribution in excess of basis will H recognize, if any? Please explain how you get the answer A) $300 b) $0 C) $400 D) $600
Q)1A) Salim and Rashid form a partnership, investing OR 80,000 and OR 120,000, respectively. Required: Determine their shares of net income: Net income is OR 60,000. The first OR 30,000 is shared on the basis of partner capital balances. The next OR 20,000 is based on partner services, with Salim getting 40% and Rashid 60%. The remainder is shared equally. B) How can partnership profits and losses be allocated.
Assume that Partner Z invested $104,551 in cash to join the partnership. What would be the increase in Partner X's capital under the bonus method? (Round to the nearest dollar). Please dont give solutions in image thnx
Required1. Given the stated fair values, if Rowe were to sell one-half of her interest in capital to someone outside the partnership, what would be a suggested asking price? 2. Given the stated fair values, if a third party were to convey assets to the partnership in exchange for a 40% interest in the partnership, what would the value of those assets have to be? 3. Assume a new partner was admitted to the partnership with a 40% interest in capital in exchange for a cash contribution of $60,000. What would Rowe’s capital balance be as a result of this transaction, assuming use of the bonus method? 4. Given the facts of (3) above, what would Rowe’s capital balance be, assuming use of the goodwill method? 5. Assume a new partner was admitted to the partnership with a 30% interest in capital in exchange for a contribution of $55,000 of net tangible assets. What would the new partner’s capital balance be as a result of this transaction, assuming use of the bonus method?
Tim and Michelle have decided to form a partnership with a 60/40 partnership interest ratio. Tim contributes P7500 cash and merchandise inventory with a market value of P1500. a. Tim, Capital will be credited in the amount of b. Michelle's investment should be C. After accounting for the total investments of Tim and Michelle, the total assets of the partnership amounts to
For Das to obtain a 1/3 interest in the partnership, how much must his cash investment be? How much is the capital of Adee upon partnership formation? Adee admitted Das as a particular in a business. The balance sheet of Adee on July 30, 2019 before the admission of Das shows: Cash 31,200 Receivables 144,000 Inventories 216,000 Accounts Payable 74,400 Adee, Capital 316,800 In order to establish Da’s Interest, the partners agreed on the following: An allowance of doubtful accounts of 2% s to be established Merchandise Inventory is to be valued at P242,400 Prepaid expenses of p4,200 and accrued expenses of P4,800 are to be recognize. Note: Please answer each number thank you.
The picture attached here is the problem. Choose the correct LETTER of answer: What is the amount of total liabilities after formation? a. P450,000 b. P475,000 c. P500,000 d. P525,000 e. None of the above. What amounts should be recorded as capital for Darren and Darryl at the formation of the partnership? a. P650,000 P450,000 b. P675,000 P475,000 c. P700,000 P500,000 d. P725,000 P525,000 e. None of the above What is the amount of total partners capital after the formation? a. P1,100,000 b. P1,150,000 c. P1,200,000 d. P1,250,000 e. None of the above
Meyers is considering investing in one of several existing partnerships and is attempting to consider the price to be paid for a partnership interest. In addition to investing cash, Meyers would be contributing a piece of land that has a fair market value of $50,000. The existing partnerships are characterized as follows:(attached)1. Determine the amount of consideration that Meyers should have to convey in order to acquire an interest in each of the partnerships.2. Assume that in addition to the land Meyers was asked to convey cash of $4,000, $60,000, and $15,000 to partnerships A through C, respectively. Determine the amount of goodwill to be recorded assuming that all assets are adjusted to fair value. Indicate to whom the goodwill is traceable.