Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

(1 bookmark) Kozar, LLP. has properly elected to file a tax return as a partnership. Kristyn owns a 40% interest and has an outside basis

(1 bookmark)

Kozar, LLP. has properly elected to file a tax return as a partnership. Kristyn owns a 40% interest and has an outside basis in her partnership interest of $24,000. Louis owns a 60% interest and has an outside basis of $80,000 in his partnership interest. The K-1s attached to Kozar, LLPs 2019 federal income tax return , which is the first year of activity for Kozar, LLP, show the following:

Non-separately stated operating income ($8,000 for Kristen) ($12,000 for Louis)

Tax exempt municipal bond interest ($1,600 for Kristen) ($2,400 for Louis)

Short term loss on sale of raw land $(-3,600 for Kristen) $(-5,400 for Louis)

On December 31, 2019, Kozar, LLP distributes $32,800 in cash to Kristyn to help her pay tuition for the year she will spend in a MAcc program. No distribution is made to Louis, because he already has more than adequate funds to pay his tuition.

a) How is the $32,800 distribution taxed to Kristyn?

b) Are there any other 2019 tax issues relating to this distribution that might affect Kristyns personal federal income tax return?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Process Audits And 6 Sigma Excellence To Mitigate Risk And Improve Business Performance

Authors: Mr Indulis Laimonis Svikis

1st Edition

B09M5FPYR4, 979-8769768996

More Books

Students also viewed these Accounting questions