• Vine Inc purchases a 20% interest in Delta LP (a Limited Partnership) interest (taxed as a tax partnership) for $10 Million cash at the beginning of 2014.

Delta LP had $0 Million debt at the beginning of 2014 and $8 Million at year end 2014. Partners share in debt based on their capital and profit interest.

Delta LP reported $5 Million Taxable Income for 2014 and Vine received a 20% distributive share of the income.

Delta LP made $2 Million cash distribution to partners in 2014 and Vine received 20%.

Compute the year end 2014 tax basis Vine Inc has in Delta LP.

• Joel, Boot Inc, Julie, and Mavon LLC fom a Limited Partnership (zz LP) and the entity uses tax partnership for tax purposes.

Joel contributes $2 Milion cash.

Boot Inc contributes intellectual property (IP) with a $12 Million FMV and $1,500,000 tax cost. The IP has a $2 Million loan attached that also gets contributed to the tax partnership.

Julie contributes a patent with $2 Million FMV and $500,000 tax cost.

Mavon LLC contributes a building with $7 Million FMV and $3 Million Tax Cost with a $1 Million Loan attached.

Joe has a 10% interest, Boot Inc has a 50% interest, Julie has a 10% interest, and Mavon LLC has 30% interest in the tax partnership (interest here for all is defined as an interest in capital and profits).

Question

You are to compute a FMV and tax cost balance sheets for zz LP at formation date using the above information.

The balance sheet one requires a listing of assets, debt and capital accounts for each tax partner at FMV.

The balance sheet two requires a listing of assets, debt and capital account for each tax partner at tax cost.

Or, you can do one balance sheet and place the FMV accounts and Tax cost accounts in separate columns.

• Once you compute the tax cost balance sheet in #3, you can solve this problem.

As, you use the same fact situation from #2.

Question

Below, you compute the adjusted tax cost (basis) of Boot Inc's interest in the tax partnership.

• Pecan Inc. (operating as a tax S corporation) is in its first year of operations. We are now at the end of the year.

Pecan Inc. has two shareholders:

The corporation received $1,000,000 total from the shareholders for their shares. Thus, the shareholders paid $1,000 cash per share.

Peacn Inc. has the following transactions for the year.

Revenues

Salary Expense

Technology Lease Expense

Consulting Fees Expense

Net Short Term Capital Gain

Charitable Contribution

Total Cash Distributions to

Shareholders

Questions

Compute the total ordinary income for Peacn Inc.

Compute the separately stated items for Pecan Inc.

Compute Monica's share of the ordinary income

Compute Monica's share of the separately state items

Compute Monica's year end tax cost (basis) in her shares

Week Four Individual Assignment ACC 455 Instructions: This assignment has four problems. You will find the problems one on each tab below listed f You click on each numbered tab to complete the particular problem. The partnership questions come from CH 9 WK4 textbook readings. The S corporation questions come from CH 11 WK4 textbook readings. You want to complete the problems in this spreadsheet and turn in one file only. ow listed from #1 through #4. FACTS Vine Inc purchases a 20% interest in Delta LP (a Limited Partnership) interest (taxed as a tax partnership) for $10 Million cash a Delta LP had $0 Million debt at the beginning of 2014 and $8 Million at year end 2014. Partners share in debt based on their ca Delta LP reported $5 Million Taxable Income for 2014 and Vine received a 20% distributive share of the income. Delta LP made $2 Million cash distribution to partners in 2014 and Vine recieved 20%. QUESTION Compute the year end 2014 tax basis Vine Inc has in Delta LP. Solution Solution 10,000,000 1,600,000 (8,000,000*.2) -1,000,000 (5,000,000*.2) -400,000 (2,000,000*.2) 10,200,000 cash at the beginning of 2014. heir capital and profit interest. FACTS Joel, Boot Inc, Julie, and Mavon LLC fom a Limited Partnership (zz LP) and the entity uses tax partnership for tax purp Joel contributes $2 Milion cash. Boot Inc contributes intellectual property (IP) with a $12 Million FMV and $1,500,000 tax cost. The IP has a $2 Million Julie contributes a patent with $2 Million FMV and $500,000 tax cost. Mavon LLC contributes a building with $7 Million FMV and $3 Million Tax Cost with a $1 Million Loan attached. Joe has a 10% interest, Boot Inc has a 50% interest, Julie has a 10% interest, and Mavon LLC has 30% interest in the t Question You are to compute a FMV and tax cost balance sheets for zz LP at formation date using the above information. The balance sheet one requires a listing of assets, debt and capital accounts for each tax partner at FMV. The balance sheet two requires a listing of assets, debt and capital account for each tax partner at tax cost. Or, you can do one balance sheet and place the FMV accounts and Tax cost accounts in separate columns. or tax purposes. a $2 Million loan attached that also gets contributed to the tax partnership. ed. rest in the tax partnership (interest here for all is defined as an interest in capital and profits). ation. t. FACTS Once you compute the tax cost balance sheet in #3, you can solve this problem. As, you use the same fact situation from #2. Question Below, you compute the adjusted tax cost (basis) of Boot Inc's interest in the tax partnership. FACTS Pecan Inc. (operating as a tax S corporation) is in its first year of operations. We are now at the end of the year. Pecan Inc. has two shareholders: Daniel owns 400 shares and Monica owns 600 shares. The The corporation received $1,000,000 total from the shareholders for their shares. Thus, the shareholders paid $1,000 Peacn Inc. has the following transactions for the year. Revenues Salary Expense Technology Lease Expense Consulting Fees Expense Net Short Term Capital Gain Charitable Contribution Total Cash Distributions to Shareholders $1,000,000 $125,000 $350,000 $75,000 $100,000 $25,000 $80,000 Questions Compute Compute Compute Compute Compute the total ordinary income for Peacn Inc. the separately stated items for Pecan Inc. Monica's share of the ordinary income Monica's share of the separately state items Monica's year end tax cost (basis) in her shares . The two shareholders have owned the shares the full year. 1,000 cash per share. DX LLC FMV Tax Cost Cash Patent Total Assets $500,000 $500,000 $500,000 $100,000 $1,000,000 $600,000 Sage Ava Total Capital $500,000 $500,000 $500,000 $100,000 $1,000,000 $600,000