12-28 At-Risk Computation. Ajax Construction builds apartments and condominiums, It has developed a unique construction technique. It created forms in the shape of a U in which concreted is poured. The U forms are then inverted and set on top of each other to form the walls and floors of a building. A crane is needed to hoist a U out of the concrete forms and stack it on top of another U. The owners of Ajax Construction, A and B, formed the AB Partnership to purchase the crane and other heavy equipment that would be rented to Ajax and other parties. The partner- ship is formed on January 1, 2019 by equal partners A and B who each contribute $100,000. The AB Partnership reports on a calendar year and is engaged in activ- ities subject to $ 465. The following transactions occurred during 2019 and 2020: 7/01/2019 AB Partnership borrows $120,000 from a bank using a recourse note. 10/01/2019 AB Partnership acquires equipment at a cost of $400,000 by giving a nonrecourse note to the vendor. 12/01/2019 AB Partnership reduces the recourse note balance to $30,000 and the nonrecourse note balance to $380,000 12/31/2019 AB Partnership reports a taxable loss of $420,000 for 2019. 12/31/2019 Partners A and B each withdraw $40,000 from the partnership. 4/01/2020 Partners A and B each contribute $50,000 to the partnership. 12/31/2020 AB Partnership reports taxable income of $120,000. a. Compute partner A's amount at risk on 12/31/2019. b. Compute partner A's amount at risk on 12/31/2020. 12-28 At-Risk Computation. Ajax Construction builds apartments and condominiums, It has developed a unique construction technique. It created forms in the shape of a U in which concreted is poured. The U forms are then inverted and set on top of each other to form the walls and floors of a building. A crane is needed to hoist a U out of the concrete forms and stack it on top of another U. The owners of Ajax Construction, A and B, formed the AB Partnership to purchase the crane and other heavy equipment that would be rented to Ajax and other parties. The partner- ship is formed on January 1, 2019 by equal partners A and B who each contribute $100,000. The AB Partnership reports on a calendar year and is engaged in activ- ities subject to $ 465. The following transactions occurred during 2019 and 2020: 7/01/2019 AB Partnership borrows $120,000 from a bank using a recourse note. 10/01/2019 AB Partnership acquires equipment at a cost of $400,000 by giving a nonrecourse note to the vendor. 12/01/2019 AB Partnership reduces the recourse note balance to $30,000 and the nonrecourse note balance to $380,000 12/31/2019 AB Partnership reports a taxable loss of $420,000 for 2019. 12/31/2019 Partners A and B each withdraw $40,000 from the partnership. 4/01/2020 Partners A and B each contribute $50,000 to the partnership. 12/31/2020 AB Partnership reports taxable income of $120,000. a. Compute partner A's amount at risk on 12/31/2019. b. Compute partner A's amount at risk on 12/31/2020
