Reference no: EM133038087

Questions -

Q1) William, Xavier and Zelda formed WXZ Partnership. William contributed land with a fair market value of $50,000 (basis of $10,000) in exchange for a 50% interest (capital and profits/losses). Zelda contributed services worth $30,000 in exchange for a 40% profit interest (profit interest only; no capital interest). Xavier owns the remaining interest in the partnership. What is WXZ's inside basis in the land immediately after the contribution?

Q2) Nhia and Maya are each 50% owners (capital & profit/loss interest) of NM Partnership. Nhia contributed land (FMV = $100,000; AB = $10,000) to the partnership in exchange for her 50% interest, and Maya contributed $100,000 cash in exchange for her 50% partnership interest. Assume that shortly after Nhia contributed the land, NM made a distribution of $100,000 to Nhia. What amount of gain does Nhia recognize on the transaction?

Q3) Nhia and Maya are each 50% owners (capital & profit/loss interest) of NM Partnership. Nhia contributed land (FMV = $100,000; AB = $10,000) to the partnership in exchange for her 50% interest, and Maya contributed $100,000 cash in exchange for her 50% partnership interest. Assume that NM Partnership did not make any distribution to Nhia after they contributed the land. Several years later, NM Partnership sold the land for $200,000. How much of the gain from the sale of the land is allocated to Nhia?

Q4) Emanuel contributed $10,000 in exchange for a 40% profit (and loss) interest in EF Partnership. Fabio contributed land (FMV = $10,000; AB = $5,000) in exchange for a 60% profit (and loss) interest in EF Partnership. The partnership agreement specifies that the first $5,000 in profits (ever, not each year) will be allocated to Emanuel.

This year (first year of operation), EF Partnership generated income of $100,000 and deductions of $92,000 (net ord. business income or profit of $8,000). There were no separately stated items. $1,000 was distributed to Emanuel this year; no distribution was made to Fabio.

What amount of EF Partnership's net ordinary business income will be allocated to Emanuel this year (i.e. for tax purposes, what amount of EF Partnership's ordinary business income will Emanuel report on his individual tax return)?