4. Ira Grams is a 60% owner of a calendar year Partnership during the tax year.

Question

4. Ira Grams is a 60% owner of a calendar year Partnership during the tax year. His beginning stock basis is $30,000, and the Partnership reports the following items.


                  Sales                                                       $64,000

                  Short-term capital gain                                        10,000

                  Section 1231 Loss                                                  6,000

                  Tax-exempt interest income                                  5,000

                  Cost of Goods Sold                                                24,000

                  Operating Expenses                                                5,000

                  Distribution to Ira Grams                                     10,000

   Ira's share of the ordinary income is:

      
$26,400
      
$20,400
      
$15,000
      
$21,000

5. Ryan's adjusted basis in the his Lux Partnership interest was $18,000 at the time he received the following nonliquidating distributions of partnership property: Cash of $15,000; Land with an adjusted basis of $14,000, but a fair market value of $30,000. Ryan's taxable gain from the distribution is:
      
$7,000
      
$15,000
      
$0
      
$12,000

9. For some entities, the basis of an ownership interest is increased by the entity profits. Which entity or entities does this apply to?
      
Applies only to a partnership
      
Applies to a corporation
      
Applies to both a partnership and an S Corporation.
      
Applies only to an S Corporation.

10. Sanjay contributes land to a business entity in January 2017 for a 10% ownership interest. Sanjay’s basis for the land is $80,000, and the fair market value is $100,000. The business entity was formed ten years ago by Polly and Rita, who have equal ownership. Which of the following statements is false?
      
If the entity is a C Corporation, Sanjay will have $20,000 of taxable income
      
If the entity is a partnership, Sanjay will have no recognized income
      
If the entity is a Partnership, Sanjay will have $20,000 of recognized income
      
If the entity is an S Corporation, Sanjay will recognize $20,000 of taxable income

Explanation / Answer

Solution for 4:- (d) : $21000

Note: As per Chegg , only First question can be solved.

Computation of IRA' Share of Ordinary Income Sales $64,000 Less: Cost pof Goods Sold $24,000 Less: Operating Expense $5,000 Net Ordinary income $35,000 Holding Percentage of IRA in partnership 60% Ir's Share of the ordinary income ( $35000*60%) $21,000

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