ACC 5330-Advanced Taxation Final Exam Review

G recieved a one third capital and profit (loss) interest in XYZ Limitied Partnership. In Exchange for the interest, G contrbuted a building with a FMV of $30,000. His adjusted basis in the building was $15,000.Building was encumbered with a $9,000 nonrecourse mortgage that XYZ assumber at the time the property was contributed. What is G’s outside basis immediately after his contribution?

$9,000

E adn B decide to form their new motorcycle business as an LLC. Each will receive an equal profits (loss) interest by contributing cash, property or both. Also, to the contributions, their LLC will obtain a $50,000 nonrecourse loan from First bank at the time it is formed. B contributes cash of $5,000 and a building he bought as a storefront for the motorcycles. Building has FMV of $45,000 and an adjusted basis of $30,000 and is secured by a $35,000 nonrecourse mortgagee that the LLC will assume. What is B’s outside tax basis in his LLC interest?

$45,000

T is talking to his freind B, who has an interest in Free, LLC about purchasing his LLC Interest. B’s outside basis in Free is $10,000. This includes his $2,500 one-fourth share of the LLC’s debt. B’s 704(b) capital account is $17,000. If T bought B’s LLC interest for $17,000, what would T’s outside basis be in Free LLC?

***$19,000

K recieved a one third profits and capital interest in Bright LLC, in exchange for legal services she provided. In addition to her share of partnership profits or losses, she receives a $30,000 guaranteed payment each year for ongoing services. for X, Bright reported the following revenues and expenses: sales- $15,000 COGS:$90,000 Depreciation Epense: $$45,000 long term capital gains: $15,000 Qualified dividends: $6,000 and muncipal bond interest: $3,000. How much oridnary business income (loss) will Bright allocate to K on her schedule K-1 for X?

-$15,000

$6,000

$9,000

$15,000

NONE OF THE CHOICES WILL BE REPOERTED AS ORDINARY BUSINESS INCOME (LOSS) ON SCHEDULE K-1

F and B are equal members in S LLC. When forming the LLC, F contributed $50,000 in cash and $50,000 worth of equipment. F’s adjusted basis in the equip was $35,000. B contributed $50,000 in cash and $50,000 worht of land. B’s adjusted baisi in the land was $30,000. On 3/15/x4, S sells the land B contributed for $60,000. How much gain (loss) related to this transaction will B report on hsi X4 return?

***$25,000

J, a partner with 30% capital and profits interest, recieved hsi k-1 from Plush, LP. At the beginning of the year, J’s tax basis in his partnership interest was $50,000, His current year K-1 reporrted an ordinary loss of $15,000, long term capital gain of $3,000, qualified dividends of $2,000 $5,000 of non deductible expenses, a $10,000 cash contribution, and a reduction of $4,000 in hsi share of partnership debt. What is J’s adjusted baisis in his partnership interest at the end of the year?

***$45,500

H had a outside babsi in LTL of $10,000 at the beginning of the year. LTL reported the follwoing items on H’s k-1 for the year: oridnary business income fo $5,000, a $10,000 reduction in H’s share of the partnersip debt , a cash distribution of $20,000 and tax exemptincoem of $3,000. What is H’s adjusted basis at the end of the year?

***$0

Jan 1, X9, G recieved his 50% profits and capital interest in High LLC, in exchange for $2,000 in cash and real proeprty with a $3,000 tax basis secured by a $2,000 nonrecourse mortgage. High reported a $15,00 loss for its X9 year. How much loss can G deduct, and how much loss must he suspend if he only appplies loss limitation?

$0, $4,000

$0,$7,500

$0, $15,000

$4,000, $0

NONE OF THE CHOICES ARE CORRECT

J has a tax basis of $14,000 in his partnership interest at the begg of the year. The follwoing amnts of partnership debt were allocated to J and are included in his beg of the year tax basis

1- recourse debt: $3,000

2- qualified nonrecourse dbt- $1,000

3- nonrecourse debt- $500

There are no charges to the debt allocated to J durign the tax year. If J is allocated a $25,000 loss for the current year, how much of the loss will be suspended under the tax basis and at risk limitations?

$1,000 , $500