Alex and Betty have agreed to form a cash-basis general partnership
As of January 1, 20X4,
Alex contributed $175,000 cash and an apartment complex valued at $2,578,000. Alex purchased the complex on April 12, 20X1 for $1,850,000 and has been operating the property as a sole proprietorship. The property is subject to a recourse debt of $775,000 that is assumed by the partnership.
Betty contributed $1,080,000 cash and an apartment complex valued at $2,600,000 and investment land valued at $425,000. Betty purchased the complex on November 7, 20X2 for $2,125,000 and has been operating the property as a sole proprietorship. The complex is subject to a nonrecourse debt of $2,127,000. The land was purchased on August 28, 20X2 for $325,000.
In November and December 20X3, Alex and Betty paid $17,000 for expenses that qualify as organizational costs. During this time, they also paid $13,000 for costs that meet the definition of start-up expenses. The $30,000 expense was paid for evenly by the two partners.
Immediately after formation, Alex and Betty agreed to admit Charles to the partnership. In return for agreeing to manage the daily operations of the partnership, Charles received a 10% interest in capital and profits. His interest in the partnership vests immediately.
- Calculate Inside Basis of Apartment Buildings contributed (assume no depreciation deducted)
- Calculate Inside Basis of Apartment Buildings contributed (assume depreciation deducted)
- Create Journal Entries for the contribution of assets for Alex and Betty (using Tax Basis and FMV)
Calculate Outside Basis for
Alex and Betty (allocate the debt to Alex and Betty based on their
50/50 ownership percentage).
Calculate Outside Basis for
Alex and Betty (allocate the debt to Alex and Betty based on their
50/50 ownership percentage).Homework Answers
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Alex and Betty have agreed to form a
cash-basis general partnership
As of January 1,
20X4,...
Question: Problem 8-4 (Algorithmic) Modified Accelerated Cost Recovery System (MACRS) (LO 8.2) On March 8, ......
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Required information [The following information applies to the questions displayed below.) AMP Corporation (calendar-year-end) has 2019...
Required information [The following information applies to the questions displayed below.) AMP Corporation (calendar-year-end) has 2019 taxable income of $1,900,000 for purposes of computing the $179 expense. During 2019, AMP acquired the following assets: (Use MACRS Table 1, Table 2, Table 3, Table 4 and Table 5.) Asset Machinery Computer equipment Office building Total Placed in Service September 12 February 10 April 2 Basis $1,420,000 430,000 545,000 $2,395,000 a. What is the maximum amount of $179 expense AMP may deduct...
Lopez acquired a building on June 1, 2015, for $8,284,900. Compute the depreciation deduction assuming the...
Lopez acquired a building on June 1, 2015, for $8,284,900. Compute the depreciation deduction assuming the building is classified as (a) residential and (b) non residential. Click here to access the depreciation table to use for this problem. If required, round your answers to the nearest dollar. a. Calculate Lopez's cost recovery deduction for 2020 if the building is classified as residential rental real estate. $ b. Calculate Lopez's cost recovery deduction for 2020 if the building is classified as...
Required information [The following information applies to the questions displayed below.] Woolard Supplies (a sole proprietorship)...
Required information [The following information applies to the questions displayed below.] Woolard Supplies (a sole proprietorship) has taxable income in 2019 of $240,000 before any depreciation deductions ($179, bonus, or MACRS) and placed some office furniture into service during the year. The furniture had been used previously by Liz Woolard (the owner of the business) before it was placed in service by the business. (Use MACRS Table 1, Table 2, Table 3, Table 4 and Table 5.) (Do not round...
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Required information [The following information applies to the questions displayed below.) Assume that TDW Corporation (calendar-year-end) has 2019 taxable income of $650,000 for purposes of computing the $179 expense. The company acquired the following assets during 2019: (Use MACRS Table 1, Table 2. Table 3, Table 4 and Table 5.) Asset Machinery Computer equipment Furniture Total Placed in Service September 12 February 10 April 2 Basis $ 2,270,000 263,000 880,000 $ 3,413,000 b. What is the maximum total depreciation, including...
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TABLE 7.3 MACRS for Residential Real Property (27.5-year property) Year 1 2 3 4 Month Placed...
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Chaz Corporation has taxable income in 2019 of $406,000 for purposes of computing the $179 expense...
Chaz Corporation has taxable income in 2019 of $406,000 for purposes of computing the $179 expense and acquired the following assets during the year $ Asset Office furniture Computer equipment Delivery truck Qualified improvement property Total Placed in Service September 12 February 10 August 21 September 30 Basis 781,000 916.000 58,000 1.517.000 $ 3,272,000 What is the maximum total depreciation deduction that Chaz may deduct in 2019? (Use MACRS Table 1. Table 2. Table 3. Table 4 and Table 5)...
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Required information [The following information applies to the questions displayed below) Assume that TDW Corporation (calendar-year-endj has 2018 taxable income of $662,000 for purposes of computing the $179 expense. The company acquired the following assets during 2018 (Use MACRS Table 1 Table 2 Table 3. Table 4 and Table 5) Placed in Septenber 12 $2,271,500 April 2 Machinery Computer equipment February 10 264,950 Furniture 882,550 3,419,000 Total b. What is the maximum total depreciation, including $179 expense that TDW may...
Chaz Corporation has taxable income in 2019 of $406,000 for purposes of computing the 5179 expense...
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Required information [The following information applies to the questions displayed below.) AMP Corporation (calendar-year-end) has 2019 taxable income of $1,900,000 for purposes of computing the $179 expense. During 2019, AMP acquired the following assets: (Use MACRS Table 1, Table 2, Table 3, Table 4 and Table 5.) Asset Machinery Computer equipment Office building Total Placed in Service September 12 February 10 April 2 Basis $1,420,000 430,000 545,000 $2,395,000 a. What is the maximum amount of $179 expense AMP may deduct...
Lopez acquired a building on June 1, 2015, for $8,284,900. Compute the depreciation deduction assuming the building is classified as (a) residential and (b) non residential. Click here to access the depreciation table to use for this problem. If required, round your answers to the nearest dollar. a. Calculate Lopez's cost recovery deduction for 2020 if the building is classified as residential rental real estate. $ b. Calculate Lopez's cost recovery deduction for 2020 if the building is classified as...
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Required information [The following information applies to the questions displayed below.) Assume that TDW Corporation (calendar-year-end) has 2019 taxable income of $650,000 for purposes of computing the $179 expense. The company acquired the following assets during 2019: (Use MACRS Table 1, Table 2. Table 3, Table 4 and Table 5.) Asset Machinery Computer equipment Furniture Total Placed in Service September 12 February 10 April 2 Basis $ 2,270,000 263,000 880,000 $ 3,413,000 b. What is the maximum total depreciation, including...
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Chaz Corporation has taxable income in 2019 of $406,000 for purposes of computing the $179 expense and acquired the following assets during the year $ Asset Office furniture Computer equipment Delivery truck Qualified improvement property Total Placed in Service September 12 February 10 August 21 September 30 Basis 781,000 916.000 58,000 1.517.000 $ 3,272,000 What is the maximum total depreciation deduction that Chaz may deduct in 2019? (Use MACRS Table 1. Table 2. Table 3. Table 4 and Table 5)...
Required information [The following information applies to the questions displayed below) Assume that TDW Corporation (calendar-year-endj has 2018 taxable income of $662,000 for purposes of computing the $179 expense. The company acquired the following assets during 2018 (Use MACRS Table 1 Table 2 Table 3. Table 4 and Table 5) Placed in Septenber 12 $2,271,500 April 2 Machinery Computer equipment February 10 264,950 Furniture 882,550 3,419,000 Total b. What is the maximum total depreciation, including $179 expense that TDW may...
Chaz Corporation has taxable income in 2019 of $406,000 for purposes of computing the 5179 expense and acquired the following assets during the year, Asset Office furniture Computer equipment Delivery truck Qualified improvement property Total Placed in Service September 12 5 February 10 August 21 September 301 Basis 781,600 916,000 58,000 ,517,000 $ 3,272,000 What is the maximum total depreciation deduction that Chaz may deduct in 2019? (Use MACRS Table 1 Table 2. Table 3. Table 4 and Table 5.)...
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