How will the gain be allocated to the partners

Reference no: EM131765490

Question: The PG Partnership was formed by Peter and George. Peter contributed $45,000 cash for a 50% partnership interest. George contributed property with a tax basis of $23,000 and a value of $45,000 for a 50% interest.

a. If PG Partnership sells the property contributed by George for $48,000, what is the taxable gain? What is the book gain?

b. How will the gain be allocated to the partners?

c. How would your answers change in a and b if the property was sold for $32,000?

d. Assume the PG Partnership holds the property contributed by George for two years before its sale. (Assume straight-line depreciation and five years left on the recovery period.) How much annual depreciation will each partner have per the books and per the tax allocation assuming the partnership uses the traditional method?

e. Explain the ceiling rule under Section 704(c) and how a partnership can eliminate the problem created by the ceiling rule.

f. Redo part d assuming the partnership uses the remedial method. What would the depreciation allocation be in Year 1? (Assume straight-line depreciation and with five years remaining on the asset. A new asset would have a 10 year useful life.) What would the depreciation allocation be in Year 6?

Reference no: EM131765490

Questions Cloud

Describe the differences in accounting principles : In personal accounting, you will build a Statement of Net Worth and a Statement of Cash Flows. These look very similar to corporate Balance Sheets.

Describe the provisions of the major labor laws : Describe the provisions of the following major labor laws as well as their impact on organizations and the union-management relationship:

Action concerning corporate social responsibility : Explain the three clear implications for action concerning corporate social responsibility (CSR) based on the institution-based and resource-based views.

Develop a scenario where you are a project manager : Develop a scenario where you are a project manager and have the option of accepting 3 different projects. Utilize an unweighted factor scoring model.

How will the gain be allocated to the partners : The PG Partnership was formed by Peter and George. Peter contributed $45,000 cash for a 50% partnership interest. George contributed property with a tax basis.

Describe treatment strategies for this disorder : Compare the diagnostic criteria for a neurocognitive disorder. Describe the etiology behind the disorder.

Discuss benson industries uses a process cost system : Prepare journal entries to record for the month of October:(Credit account titles are automatically indented when the amount is entered

Show polynomialadt interface : Show PolynomialADT interface - Create the Polynomialbata5trucClass with the methods - Add terms to the polynomials

Where religious leaders are reportedly being persecuted : On Ethics: Hypothetically, your MNE is the largest foreign investor in (1) Vietnam, where religious leaders are reportedly being persecuted,

User Account

All Pages