Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Need help on how to answer them. I know some of it but not all. If you could help would be great. Need this ASAP.
Need help on how to answer them. I know some of it but not all. If you could help would be great. Need this ASAP.
Partnership Taxable Income Partner D is a 10 percent general partner in ABCD Partnership. The partnership's financial records for the current tax year reveal the following: Gross receipts from sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cost of sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Operating expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Net income from rental real estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . Dividend income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Business meals and entertainment . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 1231 loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $820,000 (540,000) (93,000) 64,000 20,000 (8,200) (17,500) D's outside basis in his partnership interest was $125,000 at the beginning of the tax year. 1. Using Form 1065, page 1 as a guide, calculate the partnership's ordinary income/loss for the current tax year. 2. Determine D's capital account the partnership at the end of the tax year. Partnership Transactions: Partner and Partnership Partnership EFGH is a calendar year, accrual basis partnership. Partner G is a calendar year, cash basis partner. Partnership EFGH rents property from Partner G. EFGH pays market rate rent of $4,000 per month. EFGH also pays G a guaranteed payment of $10,000 per month for services performed. The following transactions occurred near year end: The December rent payment for the current year was not received by G until January 5th of the subsequent year. The December guaranteed payment was not received by G until January 10th of the subsequent year 3. In what tax year should EFGH deduct the December rent payment and in what year should G include this payment in his tax return? 4. In what year should the EFGH deduct the December guaranteed payment and in what year should G include this payment in tax return? Calculating Partnership Ordinary Income/Loss and Partner Taxable Income Partner Q is a partner in Partnership QRST. The partnership agreement states that Q's share of income and losses is 30 percent. Q provides services to QRST. Both QRST and Q use a calendar year for tax purposes. The partnership's financial records for the current year show: Gross prot . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $260,000 Guaranteed payments to Q. . . . . . . . . . . . . . . . . . Life insurance premium for Q . . . . . . . . . . . . . . . . . Operating expenses . . . . . . . . . . . . . . . . . . . . . . . Charitable contributions. . . . . . . . . . . . . . . . . . . . . Net long-term capital gain. . . . . . . . . . . . . . . . . . . (20,000) (500) (60,000) (9,000) 10,000 Q is single, has no other income, and no itemized deductions for the year. Q received the $20,000 guaranteed payments and withdrew an additional $10,000 during the year. Q's capital account in the partnership was $50,000 at the beginning of the year. 5. Using Form 1065, page 1 as a guide; calculate QRST's ordinary income for the tax year. 6. Calculate T's taxable income for the tax year of 2012. T will not be able to itemize deductions. 7. Calculate T's capital account in the partnership at the end of the tax yearStep by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started