Exercise 21-25 (Algorithmic) (LO. 15) Sweeney originally contributed $266,000 in cash for a one-fourth interest in the Gilbert LLC. During the several years that Sweeney was a member of the LLC, his share of the LLC's income was $159,600 and he withdrew $106,400 cash. The LLC's liabilities are $133,000, of which Sweeney's share is $33,250. The LLC has $66,500 of hot assets, of which Sweeney's share is $16,625. Sweeney sells his LLC interest to Jana for $351,120 cash, with Jana also assuming Sweeney's share of the LLC's liabilities. How much is Sweeney's gain on the sale, and what is its character? Sweeney's total gain on the sale is $ 138,320 X, of which $ 66,500 X recognized as ordinary income, with the remaining 71,820 X recognized as a long-term capital gain.

Exercise 21-25 (Algorithmic) (LO. 15) Sweeney originally contributed $266,000 in cash for a one-fourth interest in the Gilbert LLC. During the several years that Sweeney was a member of the LLC, his share of the LLC's income was $159,600 and he withdrew $106,400 cash. The LLC's liabilities are $133,000, of which Sweeney's share is $33,250. The LLC has $66,500 of hot assets, of which Sweeney's share is $16,625. Sweeney sells his LLC interest to Jana for $351,120 cash, with Jana also assuming Sweeney's share of the LLC's liabilities. How much is Sweeney's gain on the sale, and what is its character? Sweeney's total gain on the sale is $ 138,320 X, of which $ 66,500 X recognized as ordinary income, with the remaining 71,820 X recognized as a long-term capital gain.

SWFT Corp Partner Estates Trusts

42nd Edition

ISBN:9780357161548

Author:Raabe

Publisher:Raabe

Chapter10: Partnerships: Formation, Operation, And Basis

Section: Chapter Questions

Problem 36P

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27. Sweeney originally contributed $175,000 in cash for a one-fourth interest in the Gilbert LLC. During the several years that Sweeney was a member of the LLC, his share of the LLC’s income was $90,000 and he withdrew $75,000 cash. The LLC’s liabilities are $80,000, of which Sweeney’s share is $20,000. The LLC has $40,000 of hot assets, of which Sweeney’s share is $10,000. Sweeney sells his LLC interest to Jana for $225,000 cash, with Jana assuming Sweeney’s share of the LLC’s liabilities. How much is Sweeney’s gain on the sale, and what is its character? How much is Jana’s adjusted basis for her LLC interest? My answer. Sweeny’s gain on sale is a 125,000 and it is a capital gain. Jana’s adjusted basis is 225,000 for her LLC Interest. Please advise.
Required information Kevan, Jerry, and Dave formed Albee LLC. Jerry and Dave each contributed $245,000 in cash. Kevan contributed the following assets: Kevan: Cash Land* Totals Tax basis Fair Market Value *Nonrecourse liability secured by the land equals $210,000. Each member received a one-third capital and profits interest in the LLC. Note: Leave no answer blank. Enter zero if applicable. Round to the nearest whole thousand. Basis $ 15,000 120,000 $ 15,000 440,000 $ 135,000 $ 455,000 g. If the lender holding the nonrecourse liability secured by Kevan's land required Kevan to guarantee 1/3 of the liability and Jerry to guarantee the remaining 2/3 of the liability when Albee LLC was formed, what are the members' tax bases in their LLC interests? Kevan $285,000 X Answer is complete but not entirely correct. Jerry $ 285,000 $ Dave 285,000
Problem 12-23 (LO. 2, 3, 4) Allie forms Broadbill Corporation by transferring land (basis of $125,000, fair market value of $775,000), which is subject to a mortgage of $375,000. One month prior to incorporating Broadbill, Allie borrows $100,000 for personal reasons and gives the lender a second mortgage on the land. Broadbill Corporation issues stock worth $300,000 to Allie and assumes the mortgages on the land. If an amount is zero, enter "0". a. What are the tax consequences to Allie and to Broadbill Corporation? Since Allie has a realized gain of $ has a basis of $ in the land and Allie has a $ of which $ basis in the stock. is recognized. Broadbill Corporation
Problem 12-23 (LO. 2, 3, 4) Allie forms Broadbill Corporation by transferring land (basis of $125,000, fair market value of $775,000), which is subject to a mortgage of $375,000. One month prior to incorporating Broadbill, Allie borrows $100,000 for personal reasons and gives the lender a second mortgage on the land. Broadbill Corporation issues stock worth $300,000 to Allie and assumes the mortgages on the land. If an amount is zero, enter "0". a. What are the tax consequences to Allie and to Broadbill Corporation? Allie has a realized gain of $ of which is recognized. Broadbill Corporation Since has a basis of $ in the land and Allie has a $ basis in the stock. b. How would the tax consequences to Allie differ if she had not borrowed the $100,000? Since Allie has a recognized gain of $ Broadbill Corporation has a basis of in the land and Allie has a $ basis in the stock.
Problem 11-51 (a) (LO. 2, 3, 5, 7) Gabriel, an accountant, earns $360,000 from his practice. He also receives $9,100 in dividends and interest from various portfolio investments. During the year, he pays $85,000 to acquire a 15% interest in a partnership that produces a $120,000 loss. In addition, he has a $12,000 passive income from other sources. Compute Gabriel's AGI assuming that: a. He does not participate in the operations of the partnership. In this case, Gabriel's AGI is $fill in the blank f46766ff1f8af84_1. Problem 11-53 (a) (LO. 3, 8) Several years ago Otto acquired an apartment building that currently generates a loss of $49,000. He has AGI of $155,000 before considering the loss. Otto is not an active participant in the activity. Complete the paragraph below explaining what effect the loss will have on his AGI. The activity is activity, and Otto is not an active participant. Therefore, deduction is allowed under the real estate rental exception. The $49,000…
Exercise 19-24 (Algorithmic) (LO. 3) On January 1 of the current year, Rhondell Corporation has accumulated E & P of $54,000. Current E & P for the year is $162,000, earned evenly throughout the year. Elizabeth and Jonathan are sole equal shareholders of Rhondell from January 1 to April 30. On May 1, Elizabeth sells all of her stock to Marshall. Rhondell makes two distributions to shareholders during the year: a total of $86,400 ($43,200 to Elizabeth and $43,200 to Jonathan) on April 30 and a total of $151,200 ($75,600 to Jonathan and $75,600 Marshall) on December 31. Determine the allocation of the distributions by completing the table below. Assume that the shareholders have sufficient basis in their stock for any amount that is treated as return of capital. If an amount is zero, enter "0". If required, round any division to two decimal places and use in subsequent computations. Round final answers to the nearest dollar. April 30 distribution of $86,400 December 31 distribution of…
Exercise 19-25 (Algorithmic) (LO. 3) On January 1 of the current year, Rhondell Corporation has accumulated E & P of $168,000. Current E & P for the year is $504,000, earned evenly throughout the year. Elizabeth and Jonathan are sole equal shareholders of Rhondell from January 1 to April 30. On May 1, Elizabeth sells all of her stock to Marshall. Rhondell makes two distributions to shareholders during the year: a total of $268,800 ($134,400 to Elizabeth and $134,400 to Jonathan) on April 30 and a total of $470,400 ($235,200 to Jonathan and $235,200 to Marshall) on December 31. Determine the allocation of the distributions by completing the table below. Assume that the shareholder have sufficient basis in their stock for any amount that is treated as return of capital. If an amount is zero, enter "0". If required, round any division to two decimal places and use in subsequent computations. Round final answers to the nearest dollar. April 30 distribution of $268,800 December 31…
Required information Kevan, Jerry, and Dave formed Albee LLC. Jerry and Dave each contributed $245,000 in cash. Kevan contributed the following assets: Kevan: Cash Land* Totals Basis Fair Market Value $ 15,000 120,000 $ 15,000 440,000 $ 135,000 $ 455,000 *Nonrecourse liability secured by the land equals $210,000. Each member received a one-third capital and profits interest in the LLC. Note: Leave no answer blank. Enter zero if applicable. Round to the nearest whole thousand. f. If the lender holding the nonrecourse liability secured by Kevan's land required Kevan to guarantee 1/3 of the liability and Jerry to guarantee the remaining 2/3 of the liability when Albee LLC was formed, how much gain or loss will Kevan recognize? X Answer is complete but not entirely correct. Gain or loss recognized $ 0X
Exercise 21-21 (Algorithmic) (LO. 8) When Padgett Properties LLC was formed, Nova contributed land (value of $219,000 and basis of $54,750) and $109,500 cash, and Oscar contributed cash of $328,500. Both members received a 50% interest in LLC profits and capital. a. How is the land recorded for § 704(b) book capital account purposes? For § 704(b) book capital account purposes, Padgett records the land at $ b. What is Padgett's tax basis in the land? c. If Padgett sells the land several years later for $328,500, how much tax gain will Nova and Oscar report? Nova reports a $ gain and Oscar's gain is $
Exercise 18-23 (Algorithmic) (LO. 1, 2) Yvonne and Simon form Ion Corporation. Yvonne transfers equipment with a basis of $377,600 and fair market value of $566,400 to Ion Corporation. Simon invests $453,120 of cash. They each receive 100 shares in Ion Corporation worth $453,120, but Yvonne also receives $113,280 in cash from Ion. Calculate Ion Corporation's basis in the equipment and determine Yvonne and Simon's basis in the Ion stock. Ion Corporation has a basis of $ basis of $ for his stock. in the equipment. Yvonne has a basis of $ for her stock and Simon has a
Exercise 19-22 (Algorithmic) (LO. 3) On January 1 of the current year, Rhondell Corporation has accumulated E & P of $188,000. Current E & P for the year is $564,000, earned evenly throughout the year. Elizabeth and Jonathan are sole equal shareholders Rhondell from January 1 to April 30. On May 1, Elizabeth sells all of her stock to Marshall. Rhondell makes two distributions to shareholders during the year: a total of $300,800 ($150,400 to Elizabeth and $150,400 to Jonathan) on April 30 and a total of $526,400 ($263,200 to Jonathan and $263,200 Marshall) on December 31. Determine the allocation of the distributions by completing the table below. Assume that the shareholders have sufficient basis in their stock for any amount that is treated as return of capital. If an amount is zero, enter "O". If required, round any division to two decimal places and use in subsequent computations. Round final answers to the nearest dollar. April 30 distribution of $300,800 December 31 distribution…
Exercise 19-22 (Algorithmic) (LO. 3) On January 1 of the current year, Rhondell Corporation has accumulated E & P of $138,000. Current E & P for the year is $414,000, earned evenly throughout the year. Elizabeth and Jonathan are sole equal shareholders of Rhondell from January 1 to April 30. On May 1, Elizabeth sells all of her stock to Marshall. Rhondell makes two distributions to shareholders during the year: a total of $220,800 ($110,400 to Elizabeth and $110,400 to Jonathan) on April 30 and a total of $386,400 ($193,200 to Jonathan and $193,200 Marshall) on December 31. Determine the allocation of the distributions by completing the table below. Assume the shareholders have sufficient basis in their stock for any amount that is treated as return of capital. If an amount is zero, enter "0". If required, round any division to two decimal places and use in subsequent computations. Round final answers to the nearest dollar. April 30 distribution of $220,800 December 31 distribution of…