Assume the same facts as in Problem 45. Prepare Amy's capital account rollforward from the beginning to

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Assume the same facts as in Problem 45. Prepare Amy's capital account rollforward from the beginning to the end of the tax year. How does her capital account differ from her basis as calculated in Problem 45?
In Problem 45
Amy and Mitchell are equal partners in the accrual basis AM Partnership. At the beginning of the current year, Amy's capital account has a balance of $300,000, and the partnership has recourse debts of $200,000 payable to unrelated parties. Assume that all partnership recourse debt is shared equally between the partners. The following information about AM's operations for the current year is obtained from the partnership's records.
Ordinary income .................................... $400,000
Interest income .......................................... 4,000
Long-term capital loss ................................. 6,000
Short-term capital gain ............................... 12,000
Charitable contribution ................................. 4,000
Cash distribution to Amy ............................ 20,000
Distribution
The word "distribution" has several meanings in the financial world, most of them pertaining to the payment of assets from a fund, account, or individual security to an investor or beneficiary. Retirement account distributions are among the most...
Partnership
A legal form of business operation between two or more individuals who share management and profits. A Written agreement between two or more individuals who join as partners to form and carry on a for-profit business. Among other things, it states...
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South Western Federal Taxation 2014 Comprehensive Volume

ISBN: 9781285180922

37th Edition

Authors: William H. Hoffman, David M. Maloney, William A. Raabe, James C. Young

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