Reference no: EM132830051

The ABC partnership is composed of individual limited partners A and B and corporate general partner C. Each has a one-third interest in each item of income and deduction. A also operates a sole proprietorship.

Problem 1: Determine each partner's distributive share of income and deductions, assuming the following receipts and expenditures:

a. $10,000 in long-term capital gain

b. $3,000 in dividends from a domestic corporation

c. $2,000 of a bad debt recovery.

d. $40,000 expenditure for property qualifying for § 179.

e. $40,000 in depreciation expense, the first $10,000 of which is specially allocated to the limited partners by the partnership agreement.

f. $30,000 in investment interest expense.

g. $200,000 treasure trove (under Regulation § 1.61-14).

h. $43, 000 of § 162 expense.