Corporate Tax 2020 Rules - Please show all work

Dave and Kathy form DK Partnership. Dave transfers land to the partnership, basis $300 FMV $500. Kathy transfers cash of $500. The partnership builds a shed on the land. They each receive a 50% interest in the partnership. The enterprise was formed to operate a floral shop. In the first year, the floral shop has sales of $900, cost of goods sold of $300 and other expenses paid of $100. The partnership distributes cash of $100 to Dave and equipment basis $35 FMV $100 to Kathy.

Based on this information answer these questions.

1. DK Partnership will pay tax on which of the following:

a. the formation of the entity

b. the operations from the first year

c. the distribution of equipment

d. all of the above

e. none of the above

2. Dave and Kathy have bases in their partnership interests at formation (i.e., immediately following their contributions but before operations) of:

a. Dave 0, Kathy 0

b. Dave $300, Kathy 0

c. Dave 0, Kathy $500

d. Dave $300, Kathy $500

e. Dave $500, Kathy $500

3. DK Partnership will have a basis in the land (at the time of contribution) of:

a. 0

b. $300

c. $500

d. $800

e. $1,000

f. None of the above

4. In the first year, Dave and Kathy (the partners) have income or (loss) on their own returns from DK Partnership of:

a. Dave 0, Kathy 0

b. Dave $200, Kathy 0

c. Dave $250, Kathy $250

d. Dave $300, Kathy $300

e. Dave $450, Kathy $250

5. Dave and Kathy have yearend (i.e., after considering everything that has occurred during the year) bases in their partnership interests of:

a. Dave 0, Kathy 0

b. Dave $300, Kathy $500

c. Dave $450, Kathy $650

d. Dave $450, Kathy $715

e. Dave $550, Kathy $750