******* Scenario 8: Thomas is a 20% partner in a partnership. The partnership incurred a net loss of $220,000 for theyear, and Thomas's share of the loss is $44,000. Thomas's initial basis in the partnership was $70,000. He received a $15,000 cash distribution from the partnership. Thomas's other income includes: Wages: $105,000 Interest and DividendIncome: $3,500 Itemized Deductions: $28,000 Allowable deduction for self-employment tax: None How much of thepartnership loss can Thomas deduct considering his basis, the at-risk limitations, and passive activity loss rules? Howdoes the distribution affect his basis? Calculate Thomas's Adjusted Gross Income (AGI). What is Thomas's TaxableIncome? What is Thomas's Total Tax Liability?

Partnership basis represents a partner's economic investment in the partnership, comprising initial…

Answered: partnership loss can Thomas deduct…

SWFT Corp Partner Estates Trusts

42nd Edition

ISBN:9780357161548

Author:Raabe

Publisher:Raabe

Chapter11: Partnerships: Distributions, Transfer Of Interests, And Terminations

Section: Chapter Questions

Problem 31P

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Thandie and Marco are partners with capital balances of $60,000. They share profits and losses at 50% each. Chris contributes $30,000 to the partnership for a 1/3 share. What amount should the partnership record as a bonus to Chris? A. $20,000 B. $15,000 C. $10.500 D. $5,000
The partnership of Tatum and Brook shares profits and losses in a 60:40 ratio respectively after Tatum receives a 10,000 salary and Brook receives a 15,000 salary. Prepare a schedule showing how the profit and loss should be divided, assuming the profit or loss for the year is: A. $40,000 B. $25,000 C. ($5,000) In addition, show the resulting entries to each partners capital account. Tatums capital account balance is $50,000 and Brooks is $60,000.
Thandie and Marco are partners with capital balances of $60,000. They share profits and losses at 50%. Chris contributes $90,000 to the partnership for a 1/3 share. What amount should the partnership record as an individual bonus to each of the old partners? A. $10,000 B. $7,000 C. $3,000 D. $20,000
*********** Certainly! Here are two more scenarios: Scenario 26: Thomas is a 15% partner in a partnership. The partnership incurred a net loss of $200,000 for the year, and Thomas's share of the loss is $30,000. Thomas's initial basis in the partnership was $50,000. He received a $10,000 cash distribution from the partnership. Thomas's other income includes: Wages: $85,000 Interest and Dividend Income: $2,000 Itemized Deductions: $20,000 Allowable deduction for self-employment tax: None How much of the partnership loss can Thomas deduct considering his basis, the at-risk limitations, and passive activity loss rules? How does the distribution affect his basis? Calculate Thomas's Adjusted Gross Income (AGI). What is Thomas's Taxable Income? What is Thomas's Total Tax Liability?
Rajan, Rashmi and Richa are partners. The partnership agreement provides that partners will receive interest of 8% of their average capital balance and a salary allowance as follows: Rajan $50,000 Rashmi $40,000 Richa $40,000 Rajan, who manages the business, will receive a bonus of 25% of the profit in excess of $90 000 after partners’ interest and salary allowances have been deducted. Residual profits will be divided: Rajan ½ (half) Rashmi 1/3 (one third) Richa 1/6 (one sixth) During the current year their average capital balances were as follows: Rajan $250,000 Rashmi $150,000 Richa $90,000 Required Prepare a schedule showing how profit will be divided among the three partners if the profit for the year before the adjustment is $320,000.
Anastasia and Georgina are in partnership sharing profits and losses in the ratio 3:2. Georgina is entitled to a salary of $9,000 and interest on capital is paid at a rate of 8% per annum. The partners’ capital balances are:Anastasia $75,000Georgina $60,000The partnership statement of profit or loss for the year shows a profit of $58,500.Required:Calculate how much of the total profit is Anastasia is entitled to.
4. A and B formed a partnership. The partnership agreement stipulates the following: • Monthly salaries of P6,000 for A and P2,000 for B. • 20% bonus to A, after deductions for salary, interest, and bonus. 10% interest on the weighted average capital of B. Any remaining amount is shared equally. The partnership's records show the following: Revenues Expenses (including salary, interest, and bonus) Profit 150,000 (120,000) 30,000 n this message ose of the indiw ender and may not v reflect the views f Philippine Cultural College Page | 2 The movements in B's capital account are as follows: В. Сарital 60,000 beg. Aug. 1 withdrawal 30,000| 20,000 Mar. 31 additional investment Oct. 1 additional investment Dec. 31 additional investment 40,000 10,000 100,00 end. How much is the share of B in the partnership profit? a. 93,000 b. 52,250 с. 46,250 d. 45,000
8. Villon invested 600,000 for a 30% interest in a partnership in which the other partners have capital totaling 1,000,000 before admitting Villion. After distribution of the bonus, what is Villion's capital balance? A. 720,000 В. 600,000 C. 480,000 D. 300,000 9. S. Almeda enters into a partnership by contributing the following: Cash, 2,000; Accounts Receivable, 400; Land 24,000 cost, 40,000 fair market value; and accounts payable, 1,600. What will be the initial amount recorded in Almeda's capital account? A. 24,800 В. 42,400 С. 2,000 D. 40,800
The Distance Plus partnership has the following capital balances at the beginning of the current year along with respective profit and loss percentages: $ 105,000 Tiger (50%) Phil (20%) Ernie (30%) 75,000 90,000 Each of the following questions should be viewed independently. a. If Sergio invests $100,000 in cash in the business for a 20 percent interest, what journal entry is recorded? Assume that the bonus method is used. b. If Sergio invests $60,000 in cash in the business for a 20 percent interest, what journal entry is recorded? Assume that the bonus method is used. c. If Sergio invests $70,000 in cash in the business for a 20 percent interest, what journal entry is recorded? Assume that the goodwill method is used. Complete this question by entering your answers in the tabs below. Required A Required B Required C If Sergio invests $100,000 in cash in the business for a 20 percent interest, what journal entry is recorded? Assume that the bonus method is used. (If no entry is…

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partnership loss can Thomas deduct considering his basis, the at-risk limitations, and passive activity loss rules? How does the distribution affect his basis? Calculate Thomas's Adjusted Gross Income (AGI). What is Thomas's Taxable Income? What is Thomas's Total Tax Liability?