Adhering to Current U.S. Tax Laws please respond to the following:

-Allison receives a 10% ownership in the capital and profits of XYZ Partnership in return for services she will provide the partnership. As part of the agreement, however, if she withdraws from the partnership within two years or fails to satisfactorily perform the services required, she must return the partnership interest to the partnership. The interest she received from the partnership is currently worth $40,000. Please explain the general rule how Allison should treat this transaction. Then, explain how this transaction will be treated if she makes a Section 83(b) election.

-M and N form MN LLC. M and N share profits and losses equally. Ms initial basis in her LLC interest is $10,000. Ns initial basis is $20,000. The LLC has no liabilities at the beginning or end of the year. During the current year, the LLC experienced the following:

Sales revenue $80,000

Cost of goods sold $40,000

Long-term capital gain $20,000

Tax-exempt interest income $3,000

Guaranteed payment to M $10,000

Advertising expenses $7,000

Rent expense $5,000

a. What is Ms tax basis (outside basis) in her LLC interest at the end of the year?

b. What is Ns tax basis (outside basis) in his LLC interest at the end of the year?

-R and J form an LLC. They agree to share profits and losses equally. R transfers cash of $500 and J transfers cash of $500. The partnership then acquires a parcel of land for $5,000, using the $1,000 total cash contributed by the partners and by obtaining a $4,000 loan that both R and J personally guarantee.

a. What is each partners share of the recourse liability?

With a profit/loss ratio of 50/50,each partners share of the recourse liability is $2,000.

b. What is each partners outside basis after the partnership incurs the liability?

Since the FMV and Book Value are equal, each partners outside is $2000.

Now assume the same facts, but R and J agree to share profits 50%/50% jand losses 70%/30%.

c. What is each partners share of the recourse liability?

The partner who shares 70% would assume $2800 of the recourse liability.

The partner who shares 30% would assume $1200 of the recourse liability.

d. What is each partners outside basis after the partnership incurs the liability?

Now assume the same facts as c and d (i.e., same profit/loss sharing ratios as in c and d) except that the liability is a nonrecourse liability.

e.What is each partners share of the nonrecourse liability?

f. What is each partners outside basis after the partnership incurs the liability?

-Mitchell Corporation, Stockton Corporation, and Conley Corporation are members of the newly formed Jazz, LLC, which is treated as a partnership for income tax purposes. Here is more information regarding the three corporations.

Percentage Ownership Taxable Year

Mitchell Corporation 35% October 31

Stockton Corporation 35% June 30

Conley Corporation 30% March 31

What is the required taxable year for Jazz, LLC?

-Assume an LLC has the following balance sheet immediately before a disproportionate liquidating distribution:

Basis FMV

Cash $9,000 $9,000

Inventory $3,600 $4,500

Members A, B, and C are each one-third members of the LLC. There is no Section 704(c) built-in gain associated with the inventory. In the disproportionate distribution, A receives $4,500 in cash and B receives $4,500 in cash. C receives the inventory. Assume that all of the members have enough outside basis that the distribution does not exceed their outside basis.

a. How much ordinary income does A recognize because of the disproportionate distribution?

b. What is Cs tax basis in the inventory after the distribution?

-Abby is a partner in a partnership. She receives a liquidating distribution as follows:

Cash $100

Inventory $40 tax basis; $45 fmv

Land $170 tax basis; $250 fmv

Abbys outside basis in the partnership at the time of the distribution was $300. You can assume that there was no pre-contribution gain (i.e., built-in gain) or loss in the inventory or land.

a. How much gain or loss does the partnership recognize?

b. How much gain or loss does Abby recognize as a result of the distribution?

c. After the distribution, what is Abbys tax basis in the inventory she receives?

d. After the distribution, what is Abbys tax basis in the land she receives?

e. After the distribution, what is Abbys tax basis in her partnership interest (i.e., outside basis)?

f. Assume instead of the original facts that Abby only receives the cash and inventory (and no land) in the liquidating distribution. How much gain or loss would Abby recognize?

-R, J, and M are all equal one-third partners in Partnership RJM. M decides to withdraw from the partnership. At the time of Ms withdrawal, the partnership has the following assets: (1) cash $6,000; (2) Greenacre, with a tax basis $2,000 and fair market value $6,000; and (3) Redacre with a tax basis of $3,000 and a fair market value of $6,000.

The partnership has no liabilities and each partners capital account is $4,000. Also, assume that the properties are capital assets and none were contributed by a partner. All appreciation in the properties occurred while the properties were owned by the partnership. Assume that the partners agree to distribute Greenacre to M as a liquidating distribution to M. Ms outside basis in the partnership at the time of the distribution is $4,000.

a. How much gain or loss does M recognize as a result of the distribution?

b. What is Ms tax basis in Greenacre after the distribution?

c. If the partnership does not have a Section 754 election in place, what is the partnerships tax basis in Redacre after the distribution?

d. If the partnership does have a Section 754 election in place, what is the partnerships tax basis in Redacre after the distribution?

-R and J form RJ, LLC. R transfers property with a basis of $120 and a fair market value of $200. R receives a 50% interest in the LLCs profits and capital. J transfers $200 in cash in return for a 50% interest in the LLCs profits and capital.

a. If three years later the LLC sells the property that was contributed by R for $200, then the partnership will allocate to R a book gain of how much?

b. If three years later the LLC sells the property that was contributed by R for $200, then the partnership will allocate to R a tax gain of how much?

c. If three years later the LLC sells the property that was contributed by R for $230, then the partnership will allocate to J a book gain of how much?

d. If three years later the LLC sells the property that was contributed by R for $230, then the partnership will allocate to R a tax gain of how much?

e. If three years later the LLC sells the property that was contributed by R for $230, then the partnership will allocate to J a tax gain of how much?

f. If three years later the LLC sells the property that was contributed by R for $150, then if the partnership uses the traditional method of allocating items under Section 704(c), the partnership will allocate to R a tax gain (loss) of how much?

g. If three years later the LLC sells the property that was contributed by R for $150, then if the partnership uses the traditional method of allocating items under Section 704(c), the partnership will allocate to J a tax gain (loss) of how much?

h. If three years later the LLC sells the property that was contributed by R for $150, then if the partnership uses the remedial method of allocating items under Section 704(c), the partnership will allocate to R a tax gain (loss) of how much?

i. If three years later the LLC sells the property that was contributed by R for $150, then if the partnership uses the remedial method of allocating items under Section 704(c), the partnership will allocate to J a tax gain (loss) of how much?