Partnership

Question 1

Parternship Basis

Answer 1

Cash Contributed
\+ Basis Property Contributed
- Debt Relief
\+ Share of Debt Assumed
\+ Income
- Distribution

Question 2

Gain on Sale of Partnership Interest

Answer 2

Proceeds - (Partnership Interest - Debt Relief)
also
Proceeds + Debt Relief

Recognize ordinary income to the extent unrealized receivables or appreciated inventory exceed your basis in those items

Question 3

Partner Gain on Formation

Answer 3

Gain = Amount Debt attached to property contributed exceeds basis of property contributed

Question 4

Liquidating Distribution

Answer 4

Partnership basis reduced by cash
Remaining basis reduced by basis in property
Hot assets reduce basis first
Leftover basis allocated to left over assets

Gain = Cash Received - Basis in Partnership
Only loss if money, hot assets received is less than outside basis

Question 5

Non-Separately Stated Income

Answer 5

Revenues - Salaries - Guaranteed Payments - Rent Expense - Depreciation

Question 6

Non liquidating distribution

Answer 6

Beginning basis - cash received
Hot assets next
Remaining basis is basis in asset received
Basis reduced to zero

Question 7

Partnership interest from services rendered

Answer 7

If person receives interest from prior services rendered:

Ordinary income includable = FMV partnership assets * ownership % or value of service

Question 8

Partnership Formation

Answer 8

No Gain Recognized

Liabilities do not affect basis in assets received

Question 9

Sale of property contributed

Answer 9

Built in gain = FMV - Basis
Realized gain = Sale price - basis
- Contributing shareholder recognizes lesser of two, rest is shared equally among all shareholders or subject to profit sharing agreement