18-3 A and B form a partnership where A, the limited partner, contributes $555,000 and B, the general partner, contributes no cash. The partnership secures a $2 million (10% interest only) nonrecourse loan and acquires AB Apartments for $2.5 million. Assume that the results from the first year of operations of AB Apartments are as follows: Net operating income Less debt service (interest only) Before-tax cash flow Assume that tax depreciation the first year is $277,500. The partnership agreement provides that 90 percent of all taxable income, loss, and cash flow from operations is to be allocated to A and 10 percent to B. At resale, taxable gains or losses are to be split 50-50 between A and B, and cash proceeds are distributed first to A in an amount equal to his original investment less any cash distributions previously received, and then split 50-50 between A and B. Required: a. What are the capital account balances for A and B after one year? b. Assume that AB Apartments is sold after year 1 for $3 million with no expenses of sale. How much cash is available (before tax) from sale? c. How much cash would be distributed to A and B upon sale of the property? d. How much capital gain would be allocated to A and B upon sale of the property? e. Calculate the capital account balances for A and B after sale. Complete this question by entering your answers in the tabs below. Required A $ 272,000 -200,000 $ 72,000 Required B Required C Required D Required E What are the capital account balances for A and B after one year? (Negative amounts should be indicated by a minus sign.) A's Capital account balance aut

A and B form a partnership where A, the limited partner, contributes $555,000 and B, the general partner, contributes no cash. The partnership secures a $2 million (10\% interest only) nonrecourse loan and acquires AB Apartments for $2.5million. Assume that the results from the first year of operations of AB Apartments are as follows: Assume that tax depreciation the first year is $277,500. The partnership agreement provides that 9 percent of all taxable income, loss, and cash flow from operations is to be allocated to A and 10 percent to B. At resale, taxable gains or losses are to be split 50-50 between A and B, and cash proceeds are distributed first to A in an amount equal to his original investment less any cash distributions previously recelved, and then split 5050 between A and B. Required: a. What are the capital account balances for A and B after one year? b. Assume that AB Apartments is sold after year 1 for $3 million with no expenses of sale. How much cash is available (before tax) from sale? c. How much cash would be distributed to A and B upon sale of the property? d. How much capital gain would be allocated to A and B upon'sale of the property? e. Calculate the capital account balances for A and B after sale. Complete this question by entering your answers in the tabs below. What are the capital account balances for A and B after one year? (Negative amounts should be indicated by a minus sign.) Complete this question by entering your answers in the tabs below. Assume that AB Apartments is sold after year 1 for $3 million with no expenses of sale. How much cash is available (before tax) from sale? Complete this question by entering your answers in the tabs below. How much cash would be distributed to A and B upon sale of the property? Complete this question by entering your answers in the tabs below. How much capital gain would be allocated to A and B upon sale of the property? Calculate the capital account balances for A and B after saie. (Negative amounts should be indicated by A and B form a partnership where A, the limited partner, contributes $555,000 and B, the general partner, contributes no cash. The partnership secures a $2 million (10\% interest only) nonrecourse loan and acquires AB Apartments for $2.5million. Assume that the results from the first year of operations of AB Apartments are as follows: Assume that tax depreciation the first year is $277,500. The partnership agreement provides that 9 percent of all taxable income, loss, and cash flow from operations is to be allocated to A and 10 percent to B. At resale, taxable gains or losses are to be split 50-50 between A and B, and cash proceeds are distributed first to A in an amount equal to his original investment less any cash distributions previously recelved, and then split 5050 between A and B. Required: a. What are the capital account balances for A and B after one year? b. Assume that AB Apartments is sold after year 1 for $3 million with no expenses of sale. How much cash is available (before tax) from sale? c. How much cash would be distributed to A and B upon sale of the property? d. How much capital gain would be allocated to A and B upon'sale of the property? e. Calculate the capital account balances for A and B after sale. Complete this question by entering your answers in the tabs below. What are the capital account balances for A and B after one year? (Negative amounts should be indicated by a minus sign.) Complete this question by entering your answers in the tabs below. Assume that AB Apartments is sold after year 1 for $3 million with no expenses of sale. How much cash is available (before tax) from sale? Complete this question by entering your answers in the tabs below. How much cash would be distributed to A and B upon sale of the property? Complete this question by entering your answers in the tabs below. How much capital gain would be allocated to A and B upon sale of the property? Calculate the capital account balances for A and B after saie. (Negative amounts should be indicated by