What extent are each of the partners at risk

Reference no: EM132540606

Assignment

The ABC equal limited partnership (in which A is a general partner and B and C are limited partners) purchased an apartment building for $540,000, paying $90,000 of cash (contributed equally by the partners in the partnership) and financing the balance with a $450,000 nonrecourse loan secured by the building.

Assume that A, B, and C are all unrelated and that the partnership holds no other assets. To what extent are each of the partners at risk (i.e., compute each partner's "at-risk basis") if the loan is:

(a) From a commercial bank in which none of the parties owns an interest.

(b) From the seller of the apartment complex. See Section 465(b)(6)(A).

(c) From B's brother, who is in the money lending business and makes the loan at a rate of interest 25% below comparable rates charged to unrelated borrowers. Remember, each partner applies the at-risk rules individually.

(d) The same as (c), above, except the loan is at regular commercial rates of interest. See Section 465(b)(6)(D)(ii).

Reference no: EM132540606

Questions Cloud

Define biblical principles that should shape our behaviors : Consider biblical principles that should shape our behaviors. Then consider the additional effect of the organization and political influences on leadership.

What amount must be remitted to the state for february : Total receipts for February amounted to $38,160. If the sales tax rate is 6%, what amount must be remitted to the state for February's sales taxes?

Separation of duties : Describe the reasons why separation of duties is a critical requirement for policy framework compliance.

What is net present value : 1. What is net present value? Example 2. Define all Investment criteria.

What extent are each of the partners at risk : What extent are each of the partners at risk (i.e., compute each partner's "at-risk basis") if the loan - parties owns an interest

Determine the number of units that company : Determine which one of the alternatives management should select to achieve its annual After-tax profit objective. determine the number of units that Company

Represent interest paid in formula : If she were to consider the processing fee to represent interest paid in her formula, what would she discover to be the annual interest rate

How you will measure the effectiveness of the project : You are a project manager for a large electronics retailer (e.g., Best Buy) who will be implementing a new time keeping system to track hourly and salary.

Preparing income statement for stock holders : Can an absorption costing income statement show a profit rather than loss? Support your answer by preparing a reconciliation schedule.

User Account

All Pages