BUS FPX 4065 Assessment 7 Problems
BUS FPX 4065 Assessment 7 Problems
Student Name
Capella University
BUS-FPX4065 Income Tax Concepts and Strategies
Prof. Name
Date
Problem 1
Darrel, Sissy, and Carol established a partnership. Darrel contributed equipment, Sissy contributed a building, and Carol agreed to handle all accounting and office work in exchange for a 10% interest in the partnership.
a. Gain Recognition:
- Darrel’s equipment: No gain recognized.
- Sissy’s building: No gain recognized.
- Carol’s services: No gain recognized.
b. Basis for Each Partner:
- Darrel: $100,000
- Sissy: $50,000
- Carol: $30,000
c. Basis for Partnership Assets:
- Equipment: $100,000
- Building: $50,000
Problem 2
Wayne’s initial basis in a partnership was $46,000. His share of income and expenses for the year include ordinary income, guaranteed payment, long-term capital gain, §1231 gain, charitable contributions, §179 expense, and cash distribution.
a. Wayne’s Self-Employment Income: $74,000
b. Wayne’s Basis at Year End: $136,600
Problem 3
Karen, with a basis of $24,000 in her partnership interest, received a $12,000 cash distribution and equipment valued at $16,000 ($24,000 FMV).
a. Gain or Loss on Distribution: None recognized.
b. Karen’s Ending Partnership Basis: $0
c. Karen’s Basis in the Equipment: $12,000
Problem 4
Carrie bought a 40% partnership interest for $86,000 in February 2017. Her share of partnership income in subsequent years totaled $118,000. She sold her interest for $206,000 on December 18, 2019.
Gain or Loss on Sale: $2,000
Problem 5
Determining the basis of stock in various scenarios where the 80% rule is met.
a. Contribution of Property: Basis = $2,000
b. Contribution of Property with Cash: Basis = $6,000
c. Contribution of Property with Additional Property: Basis = $16,400
d. Contribution of Building with Mortgage: Basis = $50,000
e. Contribution of Building with Mortgage: Basis = $0
Problem 6
Calculating taxable income for a C corporation based on given book income and adjustments.
a. Taxable Income: $103,000
b. Taxable Income: $195,300
c. Taxable Income: $138,420
d. Taxable Income: $237,800
Problem 7
Determining taxable dividends, nontaxable distributions, and capital gains for various distributions.
a. Distribution: Taxable Dividend = $12,000
b. Distribution: Taxable Dividend = $13,000
c. Distribution: Taxable Dividend = $32,000, Nontaxable Distribution = $2,000
d. Distribution: Taxable Dividend = $28,000, Nontaxable Distribution = $22,000, Capital Gain = $2,000
BUS FPX 4065 Assessment 7 Problems
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