What is partnership adjusted basis for property contributed

Assignment Help Financial Accounting

Reference no: EM131212843

Kevin and Ronnie are forming the KR Partnership. Kevin contributes $600,000 cash and Ronnie contributes non-depreciable property with an adjusted basis of $400,000 and a fair market value of $750,000. The property is subject to a $150,000 liability, which is also transferred into the partnership and is shared equally by the partners for basis purposes. Kevin and Ronnie share in all partnership profits equally except for any pre-contribution gain, which must be allocated according to the statutory rules for built-in gain allocations.

a. What is Ronnie’s adjusted tax basis for his partnership interest immediately after the partnership is formed?

b. What is the partnership’s adjusted basis for the property contributed by Ronnie?

c. If the partnership sells the property contributed by Ronnie for $800,000, how is the tax gain allocated between the partners?

Reference no: EM131212843

Questions Cloud

Classify the amounts into proper accounts : Cardinal Paz Corp. carries an account in its general ledger called Investments, which contained debits for investment purchases, and no credits, with the following descriptions. Prepare entries necessary to classify the amounts into proper accounts, ..

Maintain original break-even point then selling price unit : If fixed costs increased by 10% and management wanted to maintain the original break-even point then the selling price per unit would have to be increased to _____.

Create equal distributions of profits-losses to each partner : Since a partnership does not necessarily have to create equal distributions of profits and losses to each partner, determine the best means to select the most equitable distribution, and select the method that you would use to allocate the partnershi..

The chief factor that drives short term fluctuations : If you were to pick the single most important factor that drives the fluctuation in the short term stock market prices, what would that factor be, and why do you think that it is the chief factor that drives short term fluctuations?

What is partnership adjusted basis for property contributed : Kevin and Ronnie are forming the KR Partnership. Kevin contributes $600,000 cash and Ronnie contributes non-depreciable property with an adjusted basis of $400,000 and a fair market value of $750,000. What is Ronnie’s adjusted tax basis for his partn..

Prepare a contribution format income statement : Sales revenue $ 788,000 Cost of goods sold 328,500 Gross margin 459,500 Less operating expenses Selling expense $ 24,370 Administrative expense 49,630 74,000 Net operating income $ 385,500 Bryant sells its coats for $250 each. Selling expenses consis..

Using the cost and percentage depletion computations : Last Chance Mine (LC) purchased a coal deposit for $2,465,000. It estimated it would extract 17,000 tons of coal from the deposit. LC mined the coal and sold it, reporting gross receipts of $1.43 million, $5.45 million, and $3.5 million for years 1 t..

Calculate the allowable depreciation for year two : Phil owns a ranch business and uses four-wheelers to do much of his work. Occasionally, though, he and his boys will go for a ride together as a family activity. During year 1, Phil put 1,097 miles on the four-wheeler that he bought on January 15 for..

Holding period and before-tax-after-tax equity reversion : Assume that you are an investment analyst preparing an analysis of an investment opportunity for a client. Your client is considering the acquisition of an apartment complex from a developer at the point in time when the apartments are ready for firs..

User Account

All Pages