Jay transferred his farm land to an llc in exchange for a

Assignment Help Accounting Basics

Reference no: EM13597805

Jay transferred his farm land to an LLC in exchange for a 50% interest in the capital, profits and losses. His basis in the land was $700,000 and its fair market value was $1,000,000. Ira contributed $1,000,000 cash and received a 50% interest in capital, profits and losses. The partnership spent the $1,000,000 for land development ($800,000) and selling expenses ($200,000). The land was subdivided into 40 lots priced at $80,000 each. Assume all costs are in proportion to the number of lots sold.

In year 1 the LLC sold 30 lots at the asking price. In year 2 the LLC sold the remaining 10 lots for the asking price. Allocate the taxable income.

WHAT I HAVE SO FAR: Jay Cap. Account = $1 mil, Adjusted Basis (also tax basis) = $700,000
Ira Capital Account = $1 mil, Basis = $1mil

Year 1 Profits per partner = $825k

WHAT NEEDS TO BE COMPLETED:
Taxable income, Jay, years 1 & 2
Taxable income, Ira, years 1 & 2

Reference no: EM13597805

Questions Cloud

From past experience the company has learned that 15 of a : silver company makes a product that is very popular as a mothers day gift. thus peak sales occur in may of each year as

The offices 5 canon machines are expected to last 6 more : the lansing community college registrars office is considering replacing some canon copiers with faster copiers

Jerry purchased pods that he leases to customer to store : jerry purchased pods that he leases to customer to store household goods. he invested 250000 and borrowed 1000000 to

An outside supplier has offered to provide part x at a : lindon company uses 4500 units of part x each year as a component in the assembly of one of its products. the company

Jay transferred his farm land to an llc in exchange for a : jay transferred his farm land to an llc in exchange for a 50 interest in the capital profits and losses. his basis in

Consider the following information direct materials used : consider the following information direct materials used totaled 134400 direct labor amounted to 396800 overhead was

Using the information from be19-2 assume this is the only : using the information from be19-2 assume this is the only difference between oxford pretax financial income and

The lake placid town council has decided to build a new : the lake placid town council has decided to build a new community center to be used for conventions concerts and other

Matuseski corporation is preparing its cash budget for : matuseski corporation is preparing its cash budget for october. the budgeted beginning cash balance is 17000. budgeted

User Account

All Pages