I have about half of this assignment completed. It is due this evening. Let me know if you can complete it and send me an email about price.

Nicholas Janzen 05/26/2017 Financial Reporting Dr. Dennis Phillips Assignment 7 Questions 10-18 and Problems 30-35. Problems 27-29 were in assignment #6 10. Franco owns a 60% interest in the Dulera LLC. On December 31 of the current tax year, his basis in the LLC interest is $128,000. The fair market value of the interest is $140,000. In a proportionate nonliquidating distribution, the LLC distributes $30,000 cash and equipment with an adjusted basis of $5,000 and a fair market value of $8,000 to him on that date. How much is Franco's adjusted basis in the LLC interest after the distribution and what is the amount of his basis in the equipment received? 11. Lola owns a one-half interest in the Lenax LLC. Her basis in this ownership interest is $22,000 on December 31, 2016, after accounting for the calendar year LLC's 2016 operations. On that date, the LLC distributes $25,000 cash to Lola in a proportionate nonliquidating distribution. What is the amount of any gain or loss Lola recognizes as a result of the distribution? Lola recognizes a $3,000 gain from this distribution. 12. Pablo has a $63,000 basis in his partnership interest. On May 9 of the current tax year, the partnership distributes to him, in a proportionate nonliquidating distribution, cash of $25,000, cash basis receivables with an inside basis of $0 and a fair market value of $16,000, and land with a basis and fair market value to the partnership of $80,000. a) How much is Pablo's realized and recognized gain on the distribution? Pablo has a realized gain on the distribution of $ 58,000 and a recognized gain of $ 0 b) What is Pablo's basis in the receivables, land and partnership interest following the distribution? 13. When Bruno's basis in his LLC interest is $150,000, he receives cash of $55,000, a proportionate share of inventory, and land in a distribution that liquidates both the LLC and his entire LLC interest. The inventory has a basis to the LLC of $45,000 and a fair market value of $48,000. The land's basis is $70,000 and the fair market value is $60,000. How much gain or loss does Bruno recognize and what is his basis in the inventory and land received in the distribution? 14. When Magdalena's outside basis is $58,000, she receives a liquidating distribution of $15,000 cash and a proportionate share of inventory having a partnership basis of $20,000 and a fair market value of $24,000. The distribution results in a liquidation of both the partnership and her interest. a) How much is Magdalena's basis in the inventory received? Magdalena's basis in the inventory $20,000 and her unutilized outside basis is $23,000. b) What is the amount of any gain or loss recognized on the liquidation? She has a recognized a capital loss of $23,000 on the liquidation 15. In 2016, Ryce contributes nondepreciable property with an adjusted basis of $60,000 and a fair market value of $95,000 to the Montgomery Partnership in exchange for one-half interest in profits and capital. In 2017, when the properties fair market value is $100,000, the partnership distributes the property to Jarvis, the other one-half partner. Which partner must recognize a gain and what is the amount recognized? What is the effect on the partner's basis in the partnership interest? 16. In 2015, Dudley contributed land to the Prosperity LLC. His basis in the land was $100,000. The fair market value at the contribution date was $115,000. In 2016, the LLC distributes other property with an adjusted basis of $60,000 and fair market value of $90,000 to Dudley. Dudley's basis in his LLC interest was $50,000 immediately after the distribution. As a result of the distribution in 2016, how much gain does Dudley recognize, how much is his basis in his LLC interest after the distribution, and how much is the LLC's basis in the land Dudley originally contributed? 17. Wylie receives cash of $145,000 in liquidation of his partnership interest, in which he has a basis of $110,000. The partnership owns no hot assets. After following all of the classification requirements of 736, $100,000 of his amount is classified as property payment and $45,000 is classified as a guaranteed payment. As a result of the liquidation proceeds, how much will Wylie recognize as a capital gain or loss and how much will be ordinary income? 18. The Whitewater LLP is equally owned by three partners and has the following balance sheet at the end of the current tax year: Cash Unrealized Basis $60,000 -0- FMV $60,000 15,000 receivables Land $15,000 $45,000 $75,000 $120,000 Petula, capital $25,000 $40,000 Prudence, capital $25,000 $40,000 Primrose, capital $25,000 $40,000 $75,000 $120,000 Partner Petula is an active (i.e., \"general) partner retiring from the service-oriented partnership. She receives $60,000 cash, none of which is stated to be for goodwill. a) How much of the payment is for \"unstated goodwill\"? b) How is the $60,000 allocated between a 736(a) income payment and a 736(b) property payment? 30. At the beginning of the tax year, Melodie's basis in the MIP LLC was $60,000, including her $40,000 share of the LLC's liabilities. At the end of the year, MIP distributed to Melodie cash of $10,000 and inventory (basis of $6,000, fair market value of $10,000). In addition, MIP repaid all of its liabilities by the end of the year. a) If this is a proportionate nonliquidating distribution, what is the tax effect of the distribution to Melodie and MIP? After the distribution, what is Melodie's basis in the inventory and in her MIP interest? Melodie received distributions of $50,000. $10,000 of cash and $40,000 relief of liabilities. Her basis is reduced to $10,000. Inventory takes a carryover basis of $6,000 and reduces her basis in MIP to $4,000. b) Would your answers to part (a) change if this had been a proportionate liquidating distribution? Explain. When a partnership liquidates, the liquidating distributions to a partner consist of an interest in all partnership assets. A loss is recognized when cash, unrealized receivables, or inventory is received in the distribution. The basis of some assets may be adjusted to absorb the partner's remaining outside basis. Melodie would recognize a loss of $4,000, and her basis in the inventory will be $6,000. 31. Vincent is a 50% partner in the TAV Partnership. He became a partner three years ago when he contributed land with a value of $60,000 and a basis of $30,000 (current value is $100,000). Tyler and Anita each contributed $30,000 cash for a 25% interest. Vincent's basis in his partnership interest is currently $150,000; the other partners' bases are each $75,000. The partnership has the following assets: Basis FMV Cash $200,000 $200,000 Accounts receivable -0- 200,000 Marketable securities70,000 100,000 Land 30,000 100,000 Total $300,000 $600,000 In general terms, describe the tax result if TAV distributes a $50,000 interest in the land each to Tyler and Anita and $100,000 of accounts receivable to Vincent at the end of the current year. Calculations are not required. Tyler and Anita's share of unrealized receivables is reduced from a value of $50,000 before the distribution to $25,000 after the distribution. This will result in ordinary income recognition to Tyler and Anita. A distribution of pre-contribution gain property less than seven years after it was contributed can result in a taxable gain to the contributing partner if the distribution is to a partner other than the contributing partner. In this case, Vincent would be taxed on built-in gain when the land is distributed to Tyler and Anita. 32. Assume the same facts as in Problem 31, except that TAV distributes $100,000 of cash to Vincent, $50,000 of marketable securities to Tyler, and $50,000 of accounts receivable to Anita. In general terms, describe the tax result of the distribution. The disproportionate distribution of accounts receivable to Anita will result in ordinary income to Tyler and Vincent. Gain will arise on a current distribution of cash that exceeds the partner's outside basis. The distribution of cash does not exceed Vincent's basis and there is a disproportionate distribution of accounts receivable, so Vincent will recognize ordinary income. A distribution of marketable securities is treated as a distribution of cash, but the amount of the distribution treated as cash is the fair value of the security reduced by the partner's share of appreciation. In this case, the partnership has realized appreciation, so after the reduction, the distribution is not likely to result in an amount in excess of Tyler's $75,000 basis. 33. Assume the same facts as Problem 31, except that TAV distributes a $50,000 interest in the land and $50,000 of accounts receivable to Vincent, and $25,000 of cash and $25,000 of accounts receivable each to Anita and Tyler. In general terms, describe the tax result of the distribution. For Tyler and Anita, the cash is distributed first and because the cash does not exceed their outside basis, no gain is recognized. The receivables are distributed second and the partners take a carryover basis of $0 in the receivables. For Vincent, the receivables are deemed distributed first and take a carryover basis. The land is distributed next because he is receiving a return of precontribution gain property. He will not recognize any gain or loss 34. Use the assets and partners' bases from Problem 31. Assume the partnership distributes all its assets in a liquidating distribution. In deciding the allocation of assets, what issues should the partnership consider to minimize each partner's taxable gains? If accounts receivable are distributed disproportionately to the partners, the nondistributee partners will be required to recognize ordinary income currently. The distributee partner will be able to defer the ordinary income until such time as the receivables are collected. Vincent contributed the appreciated land less than seven years ago, if any of the land is distributed to any of the other partners, Vincent will be required to recognize part or all of the $30,000 precontribution gain. The post contribution gain will be deferred until the land is sold. If the land is distributed to Vincent, he will not be required to recognize gain until he later sells the property. The cash and marketable security distributions may result in capital gains to the partners if the distribution exceeds a partner's outside basis. The potential gain from the securities is deferred to the extent it relates to appreciation earned by the partnership. 35. In each of the following independent liquidating distributions in which the partnership also liquidates, determine the amount and character of any gain or loss to be recognized by each partner and the basis of each asset (other than cash) received. In each case, assume distributions of hot assets are proportionate to the partners. a) Brandon has a partnership basis of $60,000 and receives a distribution of $75,000 in cash. Brandon recognizes a $15,000 capital gain. b) Barry has a partnership basis of $80,000 and receives $30,000 cash and a capital asset with a basis to the partnership of $40,000 and a fair market value of $50,000. No gain or loss is recognized by Barry. The $50,000 basis in the partnership interest remaining after the reduction for the $30,000 cash is allocated to the capital asset. c) Bryan has a partnership basis of $100,000 and receives $30,000 cash, inventory with a basis to the partnership of $20,000, and a capital asset with a partnership basis of $30,000. The inventory and capital asset have fair market values of $25,000 and $40,000, respectively. Bryan does not recognize any gain or loss as a result of the distribution. The inventory has a basis to Bryan of $20,000, and the capital asset allocated the $50,000 basis of Bryan's partnership interest remaining after the reduction for the cash and the amount allocated to the inventory. d) Blake has a partnership basis of $60,000 and receives a distribution of $20,000 cash and an account receivable with a basis of $0 to the partnership (value is $30,000). Blake recognizes a $40,000 capital loss on the distribution. He received only cash and unrealized receivables in the distribution. His basis in the assets received ($20,000 basis in cash + $0 carryover basis in the account receivable) is less than his $60,000 basis in the partnership interest before the distribution