Question
The XYZ partnership has the following balance sheet: Assets Tax Basis FMV Real estate $120,000 $180,000 Liabilities $0 $0 Capital X $40,000 $60,000 Y $40,000
The XYZ partnership has the following balance sheet:
| Assets |
| Tax Basis | FMV |
| Real estate |
| $120,000 | $180,000 |
|
|
|
|
|
| Liabilities |
| $0 | $0 |
|
|
|
|
|
| Capital |
|
|
|
| X |
| $40,000 | $60,000 |
| Y |
| $40,000 | $60,000 |
| Z |
| $40,000 | $60,000 |
|
|
| $120,000 | $180,000 |
If Q provides $45,000 of services in exchange for a $25% interest in the partnership, what is the tax effect to Q, X, Y, Z, and XYZ? Assume all of the partners are individuals. How much income does Q recognize? How much gain do X, Y, and Z recognize? How much of a deduction do they get? What basis will XYZ have in the Real estate? What is the balance sheet afterward? If the property is later sold for $180,000, how much gain will each partner recognize? What if it is later sold for $200,000?
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Auditing IT Infrastructures For Compliance
Authors: Martin Weiss
1st Edition
0763791814, 978-0763791810
