5. The ABC partnership is a cash-basis, calendar-year partnership. A sells his 1/3 interest to D on September 31. Revenue to the partnership is $4,500 per month, and expenses are $1,200 per month, except for (1) rent expense for the year of $6,000, paid on October 15 , (2) real estate taxes of $9,000 for the year, paid on November 1 , and (3) a long term capital gain of $15,000 from the sale of property on December 1 . (a) How much income and expenses would A be allocated under the interim closing method? (b) How would your answer be different under the interim closing method if the real estate taxes were for the period from November 1 of this year to October 31 of the next year, and the rent expense was for the 12 months from November 1 of the prior year to October 31 of the current year? 6. If a partner was given (by her mother) her interest in a partnership in which capital is a material income-producing factor, will she be treated as a valid partner for tax purposes? 7. Partner D was given (by his mother) his 20% interest in a business in which capital is a material income-producing factor, resulting in a partnership in which D and his mother are the only partners. The partnership agreement states that D will get a distributive share of 20% of the partnership income, but his mother has capital of $360,000 in the partnership, and D's capital (given to him by his mother) was $40,000. The income of the partnership before consideration of any guaranteed payment is $300,000. His mother performs services for the partnership worth $100,000, but only takes a guaranteed payment of $40,000 in return. D performs no services for the partnership, and any distribution in liquidation or withdrawal is based on capital account balances. How much should D's distributive share of partnership income be