Suzy contributed assets valued at $360,000 (basis of $200,000) in exchange for her 40% interest in Suz-Anna GP (a general partnership in which both partners are active owners). Anna contributed land and a building valued at $640,000 (basis of $380,000) in exchange for the remaining 60% interest. Anna's property was encumbered by qualified nonrecourse financing of $100,000, which was assumed by the partnership.

The partnership reports the following income and expenses for the current tax year.

Sales	$560,000
Utilities, salaries, depreciation, and other operating expenses	360,000
Short-term capital gain	10,000
Tax-exempt interest income	4,000
Charitable contributions (cash)	8,000
Distribution to Suzy	10,000
Distribution to Anna	20,000

During the current tax year, Suz-Anna refinanced the land and building. In doing so, they took out new qualified nonrecourse financing of $200,000 and used $100,000 of the proceeds to repay the original $100,000 debt (with $100,000 of cash left over for business use). At the end of the year, Suz-Anna held recourse debt of $100,000 for partnership accounts payable (recourse to the partnership but not personally guaranteed by either of the partners) and the new $200,000 debt.

a. What is Suzy's basis in Suz-Anna after formation of the partnership? Anna's basis? Suzy's beginning basis in her partnership interest is $-------, and Anna's basis is $----------.

Enter the amounts for the following items that will appear on Suzy's Schedule K-1.

Item	Amount
Ordinary income	$---------
Short-term capital gain	$----------
Tax-exempt interest income	$------------
Charitable contributions	$-----------
Distribution received by Suzy	$-----------

What income, deduction, and taxes does Suzy report on her tax return?

On her tax return, Suzy reports the ordinary income on (Schedule A/Schedule B/Schedule D/Schedule E). She reports the short-term capital gain on (Schedule A/Schedule B/Schedule D/Schedule E). She reports the charitable contributions (Schedule A/Schedule B/Schedule D/Schedule E) with her personal charitable contributions. Suzy might also be eligible for the qualified business income deduction; the partnership needs to provide additional information regarding (W-2 wages and distributions/W-2 wages and depreciable property/depreciable property and cost of goods sold/depreciation expense and W-2 wages) so that Suzy can calculate the deduction. Suzy (is/is not) subject to self-employment taxes.

c. Assume that all partnership debts are shared proportionately. At the end of the tax year, what are Suzy's basis and amount at risk in her partnership interest?

Suzy's year-end basis in her partnership interest is $--------, and Suzy's amount at risk is $---------

d. What are Suzy's tax basis capital account balances (i.e., amounts reported on Schedule K-1) at the beginning and end of the tax year? What accounts for the difference between Suzy's ending tax basis capital account and her ending tax basis in the partnership interest? Suzy's capital account balance at the beginning of the tax year is $ and at the end of the tax year is $ The capital account include the partner's share of liabilities. In this situation, Suzy's ending capital account differs from her ending tax basis, because her $ share of partnership liabilities included in her ending capital account. e. Back up in time to when Suzy and Anna first came to you for advice. How would the results have changed if Suz-Anna were formed as an LLC instead of a general partnership? How would Suz-Anna's ending liabilities be treated? How would Suzy's basis and amount at risk be different? of the LLC members are personally liable for the accounts payable of the LLC. They are in the members' bases in their LLC interests and in the amounts at risk. of the LLC members are personally liable for the nonrecourse debt of the LLC. It is in the LLC members' bases as a nonrecourse debt and in the amount at risk. Suzy's ending basis in the LLC interest is \$ , and the amount at risk in her LLC interest is $