Question 1

ABC LLC reported the following items on the LLC's Schedule K: ordinary income, $100,000; interest income, $3,000; long-term capital loss, ($4,000) ; charitable contributions, $1,000; AMT depreciation adjustment, $10,000; and cash distributions to partners, $50,000.How much will ABC show as net income (loss)  on its Analysis of Income (Loss) ?

Accepted Answer

A)  $68,000
B)  $78,000
C)  $95,000
D)  $98,000
E)  $102,000F) A) and E)
G) All of the above

Question 2

Tim, Al, and Pat contributed assets to form the equal TAP Partnership.Tim contributed cash of $40,000 and land with a basis of $80,000 (fair market value of $60,000) .Al contributed cash of $60,000 and land with a basis of $50,000 (fair market value of $40,000) .Pat contributed cash of $60,000 and a fully depreciated property ($0 basis)  valued at $40,000.Which of the following tax treatments is not correct?

Accepted Answer

A)  Tim's basis in his partnership interest is $120,000.
B)  Al realizes and recognizes a loss of $10,000.
C)  Pat realizes a gain of $40,000 but recognizes $0 gain.
D)  TAP has a basis of $80,000, $50,000, and $0 in the land and property (excluding cash)  contributed by Tim, Al, and Pat, respectively.
E)  All of these are correct.F) All of the above
G) B) and E)

Exam 14: Partnerships and Limited Liability Entities

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Exam 14: Partnerships and Limited Liability Entities

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