Problem 9-51 (LO 9-2)

[The following information applies to the questions displayed below.]

Last December 31, Ramon sold the 10 percent interest in the Del Sol Partnership that he had held for two years to Garrett for $452,500. Prior to selling his interest, Ramon's basis in Del Sol was $251,000, which included a $177,000 share of nonrecourse debt allocated to him.

Problem 9-51 Part-a

a.What is Garrett's tax basis in his partnership interest?

b.If Garrett sells his partnership interest Three months after receiving it and recognizes a gain, what is the character of his gain?

Problem 9-58 (LO 9-4)

[The following information applies to the questions displayed below.]

Turtle Creek Partnership had the following revenues, expenses, gains, losses, and distributions:

Sales revenue$60,500Long-term capital gains$4,200Cost of goods sold$(13,600)DepreciationMACRS$(3,800)Amortization of organization costs$(1,150)Guaranteed payments to partners for general management$(15,300)Cash distributions to partners$(4,800)

Problem 9-58 Part-a

a.Given these items, what is Turtle Creek's ordinary business income (loss) for the year?

b.What are Turtle Creek's separately stated items for the year?(You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect.)

• Sales revenue
• unanswered
• Long-term capital gains
• unanswered
• Cost of goods sold
• unanswered
• Depreciation MACRS
• unanswered
• Amortization of organization costs
• unanswered
• Guaranteed payments
• unanswered
• Cash distributions
• unanswered

Required information

Problem 9-59 (LO 9-4)

[The following information applies to the questions displayed below.]

Georgio owns a 20 percent profits and capital interest in Rain Tree LLC. For the current year, Rain Tree had the following revenues, expenses, gains, and losses:

Sales revenue$88,000Gain on sale of land (1231)$15,600Cost of goods sold$(27,250)DepreciationMACRS$(4,950)179 deduction*$(18,400)Employee wages$(14,700)Nondeductible fines and penalties$(5,400)Municipal bond interest$7,650Short-term capital gains$5,700Guaranteed payment to Sandra$(3,650)

*Assume the 179 property placed in service limitation does not apply.

Problem 9-59 Part-a

a.How much ordinary business income (loss) is allocated to Georgio for the year?