ACC 455 ACC455 ACC/455 ENTIRE COURSE HELP – UNIVERSITY OF PHOENIX
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ACC 455 ACC455 ACC/455 ENTIRE COURSE HELP – UNIVERSITY OF PHOENIX
ACC 455 Entire Course
ACC 455 Week 1 tax Position Paper (2 Paper)
ACC 455 Week 1 Individual Tax Return Problem 1
ACC 455 Week 2 Chapter 3 Discussion Questions
ACC 455 Week 2 Discussion Question Worksheet (New)
ACC 455 Week 2 Problems Chapter 16 and 17
ACC 455 Week 3 Signature Assignment Phoenix Medical Assignment
ACC 455 Week 3 Chapter 18, 19 Problems
ACC 455 Week 3 Chapter 11 Issue Identification Questions
ACC 455 Week 3 Discussion Questions Worksheet (New)
ACC 455 Week 4 Problems Chapter 20 and Chapter 21
ACC 455 Week 4 Team Phoenix Medical Part 1 (Form 1120)
ACC 455 Week 4 Chapter 6 Issue Identification Questions
ACC 455 Week 4 Discussion Question Worksheet (New)
ACC 455 Week 5 Problems Chapter 22 and Chapter 24
ACC 455 Week 5 Team Phoenix Medical Assignment, Part 2 (Form 1065)
ACC 455 Week 5 Chapter 5 Discussion Questions
ACC 455 Week 5 Apply Application Assignment (with Excel File)
Description
ACC 455 ACC455 ACC/455 ENTIRE COURSE HELP – UNIVERSITY OF PHOENIX
ACC 455 Entire Course
ACC 455 Week 1 tax Position Paper (2 Paper)
ACC 455 Week 1 Individual Tax Return Problem 1
ACC 455 Week 2 Chapter 3 Discussion Questions
ACC 455 Week 2 Discussion Question Worksheet (New)
ACC 455 Week 2 Problems Chapter 16 and 17
ACC 455 Week 3 Signature Assignment Phoenix Medical Assignment
ACC 455 Week 3 Chapter 18, 19 Problems
ACC 455 Week 3 Chapter 11 Issue Identification Questions
ACC 455 Week 3 Discussion Questions Worksheet (New)
ACC 455 Week 4 Problems Chapter 20 and Chapter 21
ACC 455 Week 4 Team Phoenix Medical Part 1 (Form 1120)
ACC 455 Week 4 Chapter 6 Issue Identification Questions
ACC 455 Week 4 Discussion Question Worksheet (New)
ACC 455 Week 5 Problems Chapter 22 and Chapter 24
ACC 455 Week 5 Team Phoenix Medical Assignment, Part 2 (Form 1065)
ACC 455 Week 5 Chapter 5 Discussion Questions
ACC 455 Week 5 Apply Application Assignment (with Excel File)
ACC 455 ACC455 ACC/455 ENTIRE COURSE HELP – UNIVERSITY OF PHOENIX
ACC 455 Week 1 tax Position Paper (2 Paper)
This Tutorial contains 2 Papers
ACC 455 Week 1 Tax Position Paper
Write a 700- to 1,050-word paper that includes the following:
§ What are the primary sources of tax law?
§ What are the secondary sources of tax law?
§ What is substantial authority?
§ Describe the role of the courts and the Internal Revenue Service in interpreting and applying the sources of tax law
Format your paper consistent with APA guidelines.
Click the Assignment Files tab to submit your assignment as a Microsoft® Word document.
ACC 455 ACC455 ACC/455 ENTIRE COURSE HELP – UNIVERSITY OF PHOENIX
ACC 455 Week 1 Individual Tax Return Problem 1
Resources: Appendix C of McGraw-Hill’s Taxation of Individuals and Business Entities, 2017 Edition; Form 1040; Form 1040 Instructions; IRS Publication; IRS website
Complete the Individual Tax Return Problem 1, Page C.
If information is missing, use reasonable assumptions to fill in the gaps. Form 1040, supporting tables, and instructions to the forms and schedules can be found at the IRS website.
Click the Assignment Files tab to submit your assignment.
Individual Tax Return Problem 1
Required:
Use the following information to complete Keith and Jennifer Hamilton’s 2015 federal income tax return. If information is missing, use reasonable assumptions to fill in the gaps.
Form 1040, supporting schedules, and instructions to the forms and schedules can be found at the IRS Web site (www.irs.gov).
Facts:
Keith Hamilton is employed as an airline pilot for Flyby Airlines in Las Vegas, Nevada. Jennifer is employed as a teacher’s assistant at Small World Elementary School, in Henderson, Nevada. Keith and Jennifer live in a home they purchased this year. Keith and Jennifer have three children who lived with them all year, Joshua (17), Danielle (14), and Sara (10). Keith and Jennifer provided the following personal information:
Keith and Jennifer do not want to contribute to the presidential election campaign.
Keith and Jennifer do not claim itemized deductions.
Keith and Jennifer live at 3678 Blue Sky Drive, Henderson, Nevada 89052.
Keith’s birthday is 10/12/1970 and his Social Security number is 535-22-4466.
Jennifer’s birthday is 7/16/1973 and her Social Security number is 535-44-2255.
Joshua’s birthday is 6/30/1998 and his Social Security number is 454-54-5454.
Danielle’s birthday is 8/12/2001 and her Social Security number is 343-43-4343.
Sara’s birthday is 5/13/2005 and her Social Security number is 232-32-3232. Page C-1
Keith received the following Form W-2 for 2015 from Flyby Airlines.
Jennifer received the following Form W-2 for 2015 from Small World Elementary School.
During 2015, Keith and Jennifer received $550 in interest from Las Vegas municipal bonds, $1,070 interest from U.S. Treasury bonds, and $65 from their savings account at SCD Credit Union. Keith and Jennifer are joint owners of the Las Vegas city bonds and the U.S. Treasury bonds. They have a joint savings account at SCD Credit Union. Page C-2
On January 21, 2015, Jennifer was involved in a car accident. Because the other driver was at fault, the other driver’s insurance company paid Jennifer $1,350 for medical expenses relating to her injuries from the accident and $300 for emotional distress from the accident. She received payment on March 15, 2015.
Keith’s father died on November 15, 2014. Keith received a $100,000 death benefit from his father’s life insurance policy on February 8, 2015.
On February 15, 2015, Keith hurt his arm on a family skiing trip in Utah and was unable to fly for two weeks. He received $4,000 for disability pay from his disability insurance policy. He received the check on March 2, 2015. Flyby Airlines paid $600 in premiums on this policy during 2015. The disability insurance policy premiums are paid for by Flyby Airlines as a fully taxable fringe benefit to Keith (the premiums paid on his behalf are included in Keith’s compensation amount on his W-2).
Jennifer’s grandmother died on March 10, 2015, leaving Jennifer with an inheritance of $30,000. (She received the inheritance on May 12, 2015.) Flyby Airlines had space available on its Long Island, New York, flight and provided Keith, Jennifer, and their three children with free flights so they could attend the funeral. The value of the ticket for each passenger was $600.
On April 1, 2015, Jennifer slipped in the Small World Elementary lunchroom and injured her back. Jennifer received $1,200 in worker’s compensation benefits because her work-related injury caused her to miss two weeks of work. She also received a $2,645 reimbursement for medical expenses from the health insurance company. Small World Elementary pays the premiums for Jennifer’s health insurance policy as a nontaxable fringe benefit.
On May 17, 2015, Keith and Jennifer received a federal income tax refund of $975 from their 2014 federal income tax return.
On June 5, 2015, Keith and Jennifer sold their home in Henderson, Nevada, for $510,000 (net of commissions). Keith and Jennifer purchased the home 11 years ago for $470,000. On July 12, 2015, they bought a new home for $675,000.
On July 25, 2015, Keith’s aunt Beatrice gave Keith $18,000 because she wanted to let everyone know that Keith is her favorite nephew.
On September 29, 2015, Jennifer won an iPad valued at $500 in a raffle at the annual fair held at Joshua’s high school.
Keith and Jennifer have qualifying insurance for purposes of the the Affordable Care Act (ACA).
ACC 455 ACC455 ACC/455 ENTIRE COURSE HELP – UNIVERSITY OF PHOENIX
ACC 455 Week 2 Chapter 3 Discussion Questions
Access p. 3-54 in Chapter 3 of your textbook Prentice Hall’s Federal Taxation 2016 Corporations, Partnerships, Estates & Trusts.
Write answers to questions C:3-1 through C:3-6.
Click the Assignment Files tab to submit your assignment in as a Microsoft® Word document.
ACC 455 ACC455 ACC/455 ENTIRE COURSE HELP – UNIVERSITY OF PHOENIX
ACC 455 Week 2 Discussion Question Worksheet (New)
Week 2 – Discussion Questions Worksheet
1. Pers, Inc. incorporates on September 13, 2016 and begins operations on
October 26 of the same year. What alternative tax years can Pers, Inc. elect
to report its initial year’s income if it is a C-corp? Would it make a difference if
Pers, Inc. was to be a different type of entity? Please provide specific
examples.
2. Lindel, Inc. currently uses a calendar year, but wants to change to a fiscal
year ending on September 30th.
a) Assume Lindel is a C-corp owned by 85 shareholders, each owning 5% or
less of the total stock. Can Lindel change its tax year? What steps does the
company need to take in order to do so?
b) Assume Lindel is a S-corp owned by 100 shareholders, each owning 5% or
less of the total stock. Can Lindel change its tax year? What steps does the
company need to take in order to do so?
3. American Corporation incorporates on February 15 and begins business on
August 12. The company elects its initial tax year end on October 31. The
following are expenses for American Corporation:
February 30 – Travel expenses to inspect potential business location, $1,200
March 2 – Payment to lawyer for incorporation, $5,300
March 5 – Legal fees for stock issuance, $1,200
May 20 – Salary payment to CEO, $5,000
September 1 – First rent payment, $3,000
Please classify each expense as either an organizational or start-up
expenditure. Which expenses can be deducted during the first year ending
October 31?
4. What is the difference in tax treatment for capital gains/ capital losses for a
corporation vs. an individual? Which is more beneficial?
ACC 455 ACC455 ACC/455 ENTIRE COURSE HELP – UNIVERSITY OF PHOENIX
ACC 455 Week 2 Problems Chapter 16 and 17
Access McGraw-Hill’s Connect.
Complete the Week 2 Problems:
- Discussion Question 16-1
- Discussion Question 16-4
Complete the following Ch. 17 Problems:
- Problems 17-41
- Problems 17-42
- Problems 17-58
- Problems 17-59
- Problems 17-65
- Problems 17-66
- Problems 17-70
- Problems 17-75
1.
Woodward Corporation reported pretax book income of $1,000,000. Included in the computation were favorable temporary differences of $200,000, unfavorable temporary differences of $50,000, and favorable permanent differences of $100,000. Assuming a tax rate of 34 percent, compute the company’s current income tax expense or benefit. (Amounts to be deducted should be indicated by a minus sign.)
2.
Cass Corporation reported pretax book income of $10,000,000. During the current year, the reserve for bad debts increased by $100,000. In addition, tax depreciation exceeded book depreciation by $200,000. Cass Corporation sold a fixed asset and reported book gain of $50,000 and tax gain of $75,000. Finally, the company received $250,000 of tax-exempt life insurance proceeds from the death of one of its officers. Assuming a tax rate of 34 percent, compute the company’s current income tax expense or benefit. (Amounts to be deducted should be indicated by a minus sign.)
3.
Adams Corporation has total deferred tax assets of $3,000,000 at year-end. Management is assessing whether a valuation allowance must be recorded against some or all of the deferred tax assets. What level of assurance must management have, based on the weight of available evidence, that some or all of the deferred tax assets will not be realized before a valuation allowance is required?
Probable.
More likely than not.
Realistic possibility.
Reasonable.
More than remote.
4.
Which of the following evidence would not be considered positive in determining whether Adams Corporation needs to record a valuation allowance for some or all of its deferred tax assets?
The company forecasts future taxable income because of its backlog of orders.
The company has unfavorable temporary differences that will create future taxable income when they reverse.
The company has tax-planning strategies that it can implement to create future taxable income.
The company has cumulative net income over the current and prior two years.
The company had a net operating loss carryover expire in the current year.
5.
Which of the following statements about uncertain tax positions (UTP) is correct?
UTP applies only to tax positions accounted for under ASC 740 taken on a filed tax return.
UTP applies to all tax positions accounted for under ASC 740, regardless of whether the item is taken on a filed tax return.
UTP deals with both the recognition and realization of deferred tax assets.
If a tax position meets the more-likely-than-not standard, the entire amount of the deferred tax asset or current tax benefit related to the tax position can be recognized under ASC 740.
Statements b, c, and d are correct.
6.
Cadillac Square Corporation determined that $1,000,000 of its domestic production activities deduction on its current year tax return was uncertain, but that it was more likely than not to be sustained on audit. Management made the following assessment of the company’s potential tax benefit from the deduction and its probability of occurring.
Potential Estimated Benefit Individual Probability of Occurring (%) Cumulative Probability of Occurring (%)
$ 340,000 40 40
$ 272,000 25 65
$ 170,000 20 85
0 15 100
What amount of the tax benefit related to the uncertain tax position from the domestic production activities deduction can Cadillac Square Corporation recognize in calculating its income tax provision in the current year?
7
Beacon Corporation recorded the following deferred tax assets and liabilities:
All of the deferred tax accounts relate to temporary differences that arose as a result of the company’s U.S. operations. Which of the following statements describes how Beacon should disclose these accounts on its balance sheet?
Beacon reports a net deferred tax liability of $1,250,000 on its balance sheet.
Beacon nets the deferred tax assets and the deferred tax liabilities and reports a net deferred tax asset of $1,650,000 and a net deferred tax liability of $2,900,000 on its balance sheet.
Beacon can elect to net the current deferred tax accounts and the noncurrent tax accounts and report a net current deferred tax asset of $250,000 and a net deferred tax liability of $1,500,000 on its balance sheet.
Beacon is required to net the current deferred tax accounts and the noncurrent deferred tax accounts and report a net current deferred tax asset of $250,000 and a net deferred tax liability of $1,500,000 on its balance sheet.
8.
Randolph Company reported pretax net income from continuing operations of $800,000 and taxable income of $500,000. The book-tax difference of $300,000 was due to a $200,000 favorable temporary difference relating to depreciation, an unfavorable temporary difference of $80,000 due to an increase in the reserve for bad debts, and a $180,000 favorable permanent difference from the receipt of life insurance proceeds. Randolph Company’s applicable tax rate is 34 percent.
9.b. Compute Randolph Company’s deferred income tax expense or benefit.
10.
c. Compute Randolph Company’s effective tax rate. (Round your answer to 2 decimal places.)
11
d. Complete the reconciliation of Randolph Company’s effective tax rate with its hypothetical tax rate of 34 percent. (Amounts to be deducted should be indicated by a minus sign. Round your percentages to 2 decimal places.)
ACC 455 ACC455 ACC/455 ENTIRE COURSE HELP – UNIVERSITY OF PHOENIX
ACC 455 Week 3 Signature Assignment Phoenix Medical Assignment
Resources: Medical Data Worksheet Student Part 1, Medical Worksheet Student Part 1
Include the following:
- Complete the Book Adjustments (Adj1 Sale of fixed assets, Adj2 2015 Depreciation, and Reclass of accounts payable) using the included resources.
- Adjust the Journal Entries using the included resources for 2015 depreciation.
- Apply information from the included resources to complete the Tax Adjustments:
- Accrual to Cash Adjustment – Accounts Receivable;
- Charitable contributions carryover;
- 50% Meals and Entertainment;
- Non-deductible penalties;
- Tax Exempt interest;
- Accrual to Cash Adjustment – Accounts Payable.
- Classify the Taxable Income entries on the Adjusted Trial Balance to complete using the included resources.
- Apply Generally Accepted Accounting Principles. Your manager has also listed questions that require a response. Read the Phoenix Medical Worksheet Student Part 1 (Microsoft® Word) and answer the questions using short answers.
- Complete the Microsoft® Excel® spreadsheet showing your adjustments and final tax trial balance. Answer all questions as short answers.
Click the Assignment Files tab to submit your assignment as a Microsoft® Word document or Microsoft® Excel® spreadsheet.
Medical Worksheet
Week 3 Determine Adjusted Book Income:
You are provided with the unadjusted trial balance (Microsoft® Excel) and your manager’s meeting notes and questions (Microsoft® Word) for your new tax client – Phoenix Medical.
Following the notes, modify the unadjusted trial balance to generate a trial balance workpaper (in Microsoft® Excel) that includes:
Adjusting Journal Entries
Adjusted Book Income
Tax Journal Entries
Taxable Income
Answers to your manager’s questions (Microsoft® Word or Excel).
The client depends on you, the CPA, to provide journal entries for activity in fixed assets. While discussing fixed assets, the client divulges that he got a great deal to upgrade his laser dermatology equipment. Ultimately, you find out that $569,888 of new equipment was purchased and placed in service on 6/18/2014.
Furthermore, and much after the fact, you discover that old medical equipment was sold to an unrelated party for $75,000 cash. The original cost of the equipment was $300,000 and it was fully depreciated (no Sec. 179). The cash was deposited in one of the shareholders personal accounts.
Provide a journal entry to calculate the gain on sale and adjust the fixed asset and accumulated depreciation accounts.
What is the nature of this gain?
Could the Dr. have structured this sale in a different way to avoid taxable income? How?
The client depends on his accountant to provide a journal entry for the annual depreciation expense. They have adopted a policy of treating book depreciation equal to tax depreciation. Depreciation expense for the year will include:
Depreciation on assets placed in service prior to 2014 is: $86,769
Maximize Sec. 179 expense on assets placed in service in 2014.
Take Sec. 168(k) – 50% Bonus – on new equipment if applicable.
Week 3 Determine Taxable Income:
Determine taxable income. Show all adjustments in the Microsoft® Excel spreadsheet. Footnote references are provided to assist you.
The Dr. has filed his prior tax returns on the cash basis.
What questions will you ask to be sure he can continue to file on the cash basis?
You find that in 2014, the Dr. qualifies, and choose to file on the cash basis. His books are kept on the accrual basis. Determine the adjustments needed.
No federal taxes were paid in 2013, and no estimated taxes were paid in 2014.
Within the state tax expense, you find $4,389 is late payment penalties.
While analyzing the financial information, you find that hidden in “Accounts Payable” is $28,953 of accrued salaries. You also find that the salaries were paid in the first week of February.
Does this have an impact on taxable income?
Determine the accrual to cash adjustments for accounts receivable and accounts payable.
A charitable contribution carryforward of $40,000 is available.
Included in insurance expense is $12,523 of officers’ life insurance. You determine the company is the beneficiary, and each officer is a greater than 20% shareholder.
ACC 455 ACC455 ACC/455 ENTIRE COURSE HELP – UNIVERSITY OF PHOENIX
ACC 455 Week 3 Chapter 18, 19 Problems
Access McGraw-Hill’s Connect.
Complete the following Ch. 18 Problems:
- Problems 18-35
- Problems 18-36
Complete the following Ch. 19 Problems:
- Discussion Question 19-1
- Discussion Question 19-2
- Problems 19-36
- Problems 19-37
- Problems 19-19
- Problems 19-20
- Problems 19-51
- Problems 19-52
[The following information applies to the questions displayed below.]
Jayhawk Company reports current E&P of $357,500 and accumulated E&P of negative $255,000. Jayhawk distributed $590,000 to its sole shareholder, Christine Rock, on the last day of the year. Christine’s tax basis in her Jayhawk stock is $178,000. (Leave no answer blank. Enter zero if applicable. Negative amounts should be indicated by a minus sign.)
1.
a. How much of the $590,000 distribution is treated as a dividend to Christine?
2.
b. What is Christine’s tax basis in her Jayhawk stock after the distribution?
3.
c. What is Jayhawk’s balance in accumulated E&P on the first day of next year?
The following information applies to the questions displayed below.]
This year, Sooner Company reports current E&P of negative $488,000. Its accumulated E&P at the beginning of the year was $304,000. Sooner distributed $608,000 to its sole shareholder, Boomer Wells, on June 30 of this year. Boomer’s tax basis in his Sooner stock is $100,500. (Leave no answer blank. Enter zero if applicable. Negative amounts should be indicated by a minus sign.)
4.
a. How much of the $608,000 distribution is treated as a dividend to Boomer?
5.
b. What is Boomer’s tax basis in his Sooner stock after the distribution?
6.
c. What is Sooner’s balance in accumulated E&P on the first day of next year?
Chapter 19
[The following information applies to the questions displayed below.]
Ramon incorporated his sole proprietorship by transferring inventory, a building, and land to the corporation in return for 100 percent of the corporation’s stock. The property transferred to the corporation had the following fair market values and adjusted bases:
FMV Adjusted Basis
Inventory $ 14,500 $ 5,600
Building 61,000 52,000
Land 156,000 55,500
Total $ 231,500 $ 113,100
The fair market value of the corporation’s stock received in the exchange equaled the fair market value of the assets transferred to the corporation by Ramon. (Negative amounts should be indicated by a minus sign. Leave no answer blank. Enter zero if applicable.)
1.
a. What amount of gain or loss does Ramon realize on the transfer of the property to his corporation?
2.
b. What amount of gain or loss does Ramon recognize on the transfer of the property to his corporation?
3.
c. What is Ramon’s basis in the stock he receives in his corporation?
[The following information applies to the questions displayed below.]
Carla incorporated her sole proprietorship by transferring inventory, a building, and land to the corporation in return for 100 percent of the corporation’s stock. The property transferred to the corporation had the following fair market values and adjusted bases:
FMV Adjusted Basis
Inventory $ 27,500 $ 17,600
Building 177,000 129,000
Land 255,750 320,000
Total $ 460,250 $ 466,600
The corporation also assumed a mortgage of $147,750 attached to the building and land. The fair market value of the corporation’s stock received in the exchange was $312,500. (Negative amounts should be indicated by a minus sign. Leave no answer blank. Enter zero if applicable.)
4. a. What amount of gain or loss does Carla realize on the transfer of the property to the corporation?
5. What amount of gain or loss does Carla recognize on the transfer of the property to the corporation?
6. c. What is Carla’s basis in the stock she receives in her corporation?
[The following information applies to the questions displayed below.]
Robert and Sylvia propose to have their corporation, Wolverine Universal (WU), acquire another corporation, EMU Inc., in a stock-for-stock Type B acquisition. The sole shareholder of EMU, Edie Eagle, will receive $572,500 of WU voting stock in the transaction. Edie’s tax basis in her EMU stock is $123,000. (Negative amounts should be indicated by a minus sign. Leave no answer blank. Enter zero if applicable.)
7.a. What amount of gain or loss does Edie recognize if the transaction is structured as a stock-for-stock Type B acquisition?
8. b. What is Edie’s tax basis in the WU stock she receives in the exchange?
9. c. What is the tax basis of the EMU stock held by WU after the exchange?
[The following information applies to the questions displayed below.]
Shauna and Danielle decided to liquidate their jointly owned corporation, Woodward Fashions Inc. (WFI). After liquidating its remaining inventory and paying off its remaining liabilities, WFI had the following tax accounting balance sheet:
FMV Adjusted Basis Appreciation
Cash $ 200,000 $ 200,000
Building 50,000 10,000 40,000
Land 150,000 90,000 60,000
Total $ 400,000 $ 300,000 $ 100,000
Under the terms of the agreement, Shauna will receive the $200,000 cash in exchange for her 50 percent interest in WFI. Shauna’s tax basis in her WFI stock is $50,000. Danielle will receive the building and land in exchange for her 50 percent interest in WFI. Danielle’s tax basis in her WFI stock is $100,000.
Assume for purposes of this problem that the cash available to distribute to the shareholders has been reduced by any tax paid by the corporation on gain recognized as a result of the liquidation. (Leave no answer blank. Enter zero if applicable. Negative amounts should be indicated by a minus sign.)
10. a. What amount of gain or loss does WFI recognize in the complete liquidation?
11. b. What amount of gain or loss does Shauna recognize in the complete liquidation?
12. c. What amount of gain or loss does Danielle recognize in the complete liquidation?
13. d. What is Danielle’s tax basis in the building and land after the complete liquidation?
ACC 455 ACC455 ACC/455 ENTIRE COURSE HELP – UNIVERSITY OF PHOENIX
ACC 455 Week 3 Chapter 11 Issue Identification Questions
Access p. 11-41 in Chapter 11 of your textbook Prentice Hall’s Federal Taxation 2016 Corporations, Partnerships, Estates & Trusts.
Write a minimum 175-word response to each question C:11-24 through C:11-27.
Click the Assignment Files tab to submit your assignment as a Microsoft® Word document.
ACC 455 ACC455 ACC/455 ENTIRE COURSE HELP – UNIVERSITY OF PHOENIX
ACC 455 Week 3 Discussion Questions Worksheet (New)
Week 3 – Discussion Questions Worksheet (each question needs a minimum of a 175 word count answer)
1. Jeff and Louis own an S Corporation. Jeff and Louis own 50% of the corporation each. Jeff’s S Corporation stock basis at the beginning of the year was $150,000. Louis’ was $120,000. The company is reporting an ordinary loss of $285,000. How can this loss affect Jeff’s tax liability? What about Louis’ tax liability?
2. Mary and Paul began a partnership 10 years ago that has been incredibly successful. Mary and Paul own 50% of the partnership each. Mary and Paul’s accountant has suggested that they incorporate as an S corp. To do so, the partnership will exchange all its existing assets and liabilities for the new S Corp stock on October 1 of the current year.
The partnership will then liquidate by distributing the acquired S Corp stock to Mary and Paul, in equal parts. What are some of the most relevant tax implications of this transaction? Do you believe Mary and Paul’s accountant is providing good advice?
3. Anna and Brandon own an S Corporation. Anna and Brandon own 50% of the corporation each. Anna’s S Corporation stock basis at the beginning of the year was $175,000. Brandon’s was $225,000. The company is reporting an ordinary gain of $125,000 and will distribute land with a $85,000 adjusted basis and $425,000 FMV.
How can this gain affect Anna’s tax liability? What about Brandon’s tax liability? What implications would this distribution have for each of them? Please calculate the gain that will be reported by each Anna and Brandon.
4. Johnson Corporation is a C Corp that has been in business since 2000. The corporation’s accountant, John Smith, has recommended converting from C corporation status to S corporation status. Johnson Corporation has assets with a $540,000 adjusted basis and an $800,000 fair market value. Liabilities are $75,000.
The corporation is owned solely by its founder, Ray Johnson. Currently, Johnson Corporation uses accrual accounting and has selected a fiscal year which ends on June 30. Do you believe the conversion to S status is appropriate? What implications would it have on the corporation’s tax liability? What about Ray Johnson’s personal tax liability?
ACC 455 ACC455 ACC/455 ENTIRE COURSE HELP – UNIVERSITY OF PHOENIX
ACC 455 Week 4 Problems Chapter 20 and Chapter 21
Access McGraw-Hill’s Connect.
Complete the following Ch. 20 Problems:
- Discussion Question 20-1
- Discussion Question 20-2
- Problems 20-37
- Problems 20-38
- Problems 20-73
- Problems 20-74
Complete the following Ch. 21 Problems:
- Problems 21-34
- Problems 21-35
- Problems 21-55
- Problems 21-56
[The following information applies to the questions displayed below.]
Joseph contributed $25,750 in cash and equipment with a tax basis of $14,800 and a fair market value of $19,500 to Berry Hill Partnership in exchange for a partnership interest.
1.
a. What is Joseph’s tax basis in his partnership interest?
2.
b. What is Berry Hill’s basis in the equipment?
[The following information applies to the questions displayed below.]
Lance contributed investment property worth $660,000, purchased Three years ago for $337,500 cash, to Cloud Peak LLC in exchange for an 90 percent profits and capital interest in the LLC. Cloud Peak owes $452,500 to its suppliers but has no other debts.
3.
a. What is Lance’s tax basis in his LLC interest?
4.
b. What is Lance’s holding period in his interest?
5.
c. What is Cloud Peak’s basis in the contributed property?
6.
d. What is Cloud Peak’s holding period in the contributed property?
[The following information applies to the questions displayed below.]
Alfonso began the year with a tax basis in his partnership interest of $30,000. His share of partnership debt at the beginning and end of the year consists of $4,000 of recourse debt and $6,000 of nonrecourse debt. During the year, he was allocated $40,000 of partnership ordinary business loss. Alfonso does not materially participate in this partnership and he has $1,000 of passive income from other sources.
7.
a. How much of Alfonso’s loss limited by his tax basis?
8.
b. How much of Alfonso’s loss is limited by his at-risk amount?
9.
c. How much of Alfonso’s loss is limited by the passive activity loss rules?
[The following information applies to the questions displayed below.]
Jenna began the year with a tax basis of $45,000 in her partnership interest. Her share of partnership debt consists of $6,000 of recourse debt and $10,000 of nonrecourse debt at the beginning of the year and $6,000 of recourse debt and $13,000 of nonrecourse debt at the end of the year. During the year, she was allocated $65,000 of partnership ordinary business loss. Jenna does not materially participate in this partnership and she has $4,000 of passive income from other sources.
10
a. How much of Jenna’s loss is limited by her tax basis?
11.
b. How much of Jenna’s loss is limited by her at-risk amount?
12.
c. How much of Jenna’s loss is limited by the passive activity loss rules?
13.
What is a flow-through entity, and what effect does this designation have on how business entities and their owners are taxed?
14.
What types of business entities are taxed as flow-through entities?
Chapter 21
[The following information applies to the questions displayed below.]
At the end of last year, Lisa, a 35 percent partner in the five-person LAMEC Partnership, has an outside basis of $60,000, including her $30,000 share of LAMEC debt. On January 1 of the current year, Lisa sells her partnership interest to MaryLynn for a cash payment of $45,000 and the assumption of her share of LAMEC’s debt.
1.
a. What is the amount and character of Lisa’s recognized gain or loss on the sale?
2.
b. If LAMEC has $100,000 of unrealized receivables as of the sale date, what is the amount and character of Lisa’s recognized gain or loss?
3.
c. What is MaryLynn’s initial basis in the partnership interest?
[The following information applies to the questions displayed below.]
Marco, Jaclyn, and Carrie formed Daxing Partnership (a calendar-year-end entity) by contributing cash 10 years ago. Each partner owns an equal interest in the partnership. Marco, Jaclyn, and Carrie each have an outside basis in his/her partnership interest of $104,000. On January 1 of the current year, Marco sells his partnership interest to Ryan for a cash payment of $137,000. The partnership has the following assets and no liabilities as of the sale date:
Tax Basis FMV
Cash $ 18,000 $ 18,000
Accounts receivable 0 12,000
Inventory 69,000 81,000
Equipment 180,000 225,000
Stock investment 45,000 75,000
Totals $ 312,000 $ 411,000
The equipment was purchased for $240,000, and the partnership has taken $60,000 of depreciation. The stock was purchased seven years ago.
4.
a. What are the hot assets [§751(a)] for this sale?
5.
b. What is Marco’s gain or loss on the sale of his partnership interest?
6.
c. What is the character of Marco’s gain or loss?
7.
d. What are Ryan’s inside and outside bases in the partnership on the date of the sale?
[The following information applies to the questions displayed below.]
Michelle pays $120,000 cash for Brittany’s one-third interest in the Westlake Partnership. Just prior to the sale, Brittany’s basis in Westlake is $96,000. Westlake reports the following balance sheet:
Tax Basis FMV
Assets:
Cash $ 96,000 $ 96,000
Land 192,000 264,000
Totals $ 288,000 $ 360,000
Liabilities and capital:
Capital – Amy 96,000
– Brittany 96,000
– Ben 96,000
Totals $ 288,000
(Do not round intermediate calculations. Leave no answer blank. Enter zero if applicable.)
8.
a. What is the amount and character of Brittany’s recognized gain or loss on the sale?
9.
b. What is Michelle’s basis in her partnership interest? What is Michelle’s inside basis?
10
c. If Westlake were to sell the land for $264,000 shortly after the sale of Brittany’s partnership interest, how much gain or loss would the partnership recognize?
11.
d. How much gain or loss would Michelle recognize?
12
e-1. Suppose Westlake has a §754 election in place. What is Michelle’s special basis adjustment?
e-2. Suppose Westlake has a §754 election in place. How much gain or loss would Michelle recognize on a subsequent sale of the land in this situation?
[The following information applies to the questions displayed below.]
Cliff’s basis in his Aero Partnership interest is $11,000. Cliff receives a distribution of $22,000 cash from Aero in complete liquidation of his interest. Aero is an equal partnership with the following balance sheet:
Tax Basis FMV
Assets:
Cash $ 22,000 $ 22,000
Investment 8,800 8,800
Land 2,200 35,200
Totals $ 33,000 $ 66,000
Liabilities and capital:
Capital – Chris 11,000
– Cliff 11,000
– Cooper 11,000
Totals $ 33,000
13.
a-1. What is the amount and character of Cliff’s recognized gain or loss?
a-2. Will the distribution have any effect on the partnership assets?
14.
b. If Aero has a §754 election in place, what is the amount of the special basis adjustment?
ACC 455 ACC455 ACC/455 ENTIRE COURSE HELP – UNIVERSITY OF PHOENIX
ACC 455 Week 4 Team Phoenix Medical Part 1 (Form 1120)
Utilizing the spreadsheet and worksheet generated in Week 3, prepare pages 1 through 5 of Form 1120 – US Corporation Income Tax Return:
- Utilize PDF fill-in form.
- See additional information attached.
Click the Assignment Files tab to submit your assignment as a Microsoft® Word document.
ACC 455 ACC455 ACC/455 ENTIRE COURSE HELP – UNIVERSITY OF PHOENIX
ACC 455 Week 4 Chapter 6 Issue Identification Questions
Access p. 6-23 in Chapter 6 of your textbook Prentice Hall’s Federal Taxation 2016 Corporations, Partnerships, Estates & Trusts.
Write a minimum 175-word response to each question, C:6-29 though C:6-31.
Click the Assignment Files tab to submit your assignment as a Microsoft® Word document.
C:6-29: What tax issues should Cable, John, and Peter consider with respect to the liquidation?
C:6-30: What tax issues should Parent and Subsidiary consider with respect to the bankruptcy and liquidation of Subsidiary?
C:6-31: What tax issues should Harry and Rita consider with respect to this pending liquidation?
ACC 455 ACC455 ACC/455 ENTIRE COURSE HELP – UNIVERSITY OF PHOENIX
ACC 455 Week 4 Discussion Question Worksheet (New)
Week 4 – Discussion Questions Worksheet
1. The holding company Port, Inc. is owned 50% by John and 50% by Peter. The company invests in real estate bonds and stocks, land and buildings from different enterprises, including Omega, Inc.; Landside, Inc.; and Best Properties, LLC. In order to avoid personal holding company tax, Peter and John plan to liquidate Port, Inc. within the next quarter. Please consider the following questions with respect to this case:
a. In which case would the open transaction doctrine apply to Port, Inc.?
b. Can Port, Inc. change its market composition/activities to decrease personal holding company tax?
2. Nancy owns 25% of Mayfair Corporation stock. She currently has $200,000 adjusted basis. She is a cash basis accounting taxpayer. Mayfair has indicated that they will issue a year-end, $270,000 liquidating distribution to Nancy for year 2016. This distribution will be paid on January 3, 2017
. a) What is the amount of gain or loss that Nancy will report in 2016?
b) What about in 2017? Please explain in detail or provide calculations.
c) How would your answer differ if Nancy was an accrual method accounting taxpayer.
3. The Best of Boston, Inc. is a company that provides customized tourist services, such as charters and sightseeing tours in the city of Boston. The company is owned 75% by Linda Smith and 25% by her sister, Amy Smith. Linda has recently married and she is moving with her husband to New York City. As such, Linda and Amy have decided to liquidate the business. Linda will open a new business, the Best of New York, once she is settled. She has decided to take two small vans that belong to Best of Boston, Inc. as her final distribution. Amy, on the other hand, will keep the existing savings of $50,000. Please consider the following questions with respect to this case:
a. Assume you are Best of Boston’s accountant. Would you suggest an alternate strategy to minimize or avoid liquidation tax?
b. What gain or loss would Amy recognize?
c. Would Best of Boston recognize a loss on the distribution of the two vans?
ACC 455 ACC455 ACC/455 ENTIRE COURSE HELP – UNIVERSITY OF PHOENIX
ACC 455 Week 5 Problems Chapter 22 and Chapter 24
Access McGraw-Hill’s Connect.
Complete the following Ch. 22 Problems:
- Discussion Question 22-15
- Discussion Question 22-16
- Problems 22-51
- Problems 22-54
- Problems 22-66
- Problems 22-67
Complete the following Ch. 24 Problems:
- Discussion Question 24-11
- Discussion Question 24-12
- Discussion Question 24-31
- Discussion Question 24-33
1.
Apple Union (AU), a C corporation with a March 31 year-end, uses the accrual method of accounting. If AU elects to be taxed as an S corporation, what will its year-end and method of accounting be (assuming no special elections)?
2.
Compare and contrast the method of allocating income or loss to owners for partnerships and for S corporations.
3. 3.Award: 1 out of 1.00 point Show correct answer
Assume Jack and Jill, 25 and 75 percent shareholders in UpAHill Corporation, have tax bases in their shares at the beginning of year 1 of $24,000 and $56,000, respectively.
UpAHill Corporation (an S Corporation)
Income Statement
December 31, year 1 and year 2
Year 1 Year 2
Sales revenue $ 175,000 $ 310,000
Cost of goods sold (60,000 ) (85,000 )
Salary to owners Jack and Jill (40,000 ) (50,000 )
Employee wages (15,000 ) (20,000 )
Depreciation expense (10,000 ) (15,000 )
Miscellaneous expenses (7,500 ) (9,000 )
Interest income 2,000 2,500
Dividend income 500 1,000
Overall net income $ 45,000 $ 134,500
Also assume no distributions were made. Given the income statement above, what are their tax bases in their shares at the end of year 1?
4.
Harry, Hermione, and Ron formed an S corporation called Bumblebore. Harry and Hermione both contributed cash of $25,000 to get things started. Ron was a bit short on cash but had a parcel of land valued at $60,000 (basis of $50,000) that he decided to contribute. The land was encumbered by a $35,000 mortgage. What tax bases will each of the three have in his or her stock of Bumblebore?
[The following information applies to the questions displayed below.]
Maple Corp., a calendar-year corporation, was formed three years ago by its sole shareholder, Brady, who immediately elected S corporation status. On December 31 of the current year, Maple distributed $30,000 cash to Brady.
What is the amount and character of gain Brady must recognize on the distribution in each of the following alternative scenarios? (Leave no answer blank. Enter zero if applicable.)
5.
a. At the time of the distribution, Brady’s basis in his Maple Corp. stock was $35,000.
6.
b. At the time of the distribution, Brady’s basis in his Maple Corp. stock was $8,000.
7.
c. At the time of the distribution, Brady’s basis in his Maple Corp. stock was $0.
[The following information applies to the questions displayed below.]
Oak Corp., a calendar-year corporation, was formed three years ago by its sole shareholder, Glover, and has always operated as a C corporation. However, at the beginning of this year, Glover made a qualifying S election for Oak Corp., effective January 1. Oak Corp. did not have any C corporation earnings and profits on that date. On June 1, Oak Corp. distributed $15,000 to Glover.
What is the amount and character of gain Glover must recognize on the distribution, and what is his basis in his Oak Corp. stock in each of the following alternative scenarios? (Leave no answer blank. Enter zero if applicable.)
8.
a. At the time of the distribution, Glover’s basis in his Oak Corp. stock was $35,000.
9.
b. At the time of the distribution, Glover’s basis in his Oak Corp. stock was $8,000.
10.
c. At the time of the distribution, Glover’s basis in his Oak Corp. stock was $0.
Chapter 24
1. Why are the income source rules important to a U.S. citizen or resident?
2.
Why are the income source rules important to a U.S. nonresident?
3.
What is a hybrid entity for U.S. tax purposes? Why is a hybrid entity a popular organizational form for a U.S. company expanding its international operations? What are the potential drawbacks to using a hybrid entity?
4.
What are the requirements for a foreign corporation to be a controlled foreign corporation for U.S. tax purposes?
ACC 455 ACC455 ACC/455 ENTIRE COURSE HELP – UNIVERSITY OF PHOENIX
ACC 455 Week 5 Team Phoenix Medical Assignment, Part 2 (Form 1065)
ACC 455 Week 5 Team Assignment, Part 3
Utilizing the included resources, complete tax Form 1065.
Click the Assignment Files tab to submit your assignment as a Microsoft® Word document.
ACC 455 ACC455 ACC/455 ENTIRE COURSE HELP – UNIVERSITY OF PHOENIX
ACC 455 Week 5 Chapter 5 Discussion Questions
Access p. 5-38 in Chapter 5 of your textbook Prentice Hall’s Federal Taxation 2016 Corporations, Partnerships, Estates & Trusts.
Write answers to questions C:5-1 through C:5-10.
Click the Assignment Files tab to submit your assignment as a Microsoft® Word document.
C:5-1 Explain Congress’ intent for enacting the AMT.
C:5-2 Define the following terms relating to the AMT:
C:5-3 Dunn Corporation is not a small corporation exempt from the AMT. Dunn’s CPA does not calculate the AMT because he knows that Dunn’s taxable income is less than the $40,000 AMT exemption amount allowed to corporations. Is the CPA correct in his belief? Explain.
C:5-4 What special rules (if any) apply to the AMT calculation for the following entities:
C:5-5 Agnew Corporation operates a small manufacturing business. During Year 1 (its first tax year, which is 12 months long), Agnew sells goods for $3.8 million for which the cost of goods sold is $2.8 million. Agnew’s owner estimates that future sales and cost of goods sold will grow by 25% each year. Agnew is not related to any other corporations. Is Agnew exempt from the AMT in Year 1? In any of the next five years? Explain.
C:5-6 Menifee Corporation has conducted business for several years, and its annual gross receipts never have been more than $4 million. Jackie, who has owned all of Menifee’s stock since she incorporated it, purchases all of Estill Corporation’s stock in the current year. Estill’s annual gross receipts have been approximately $6 million in recent years.
C:5-6 Menifee Corporation has conducted business for several years, and its annual gross receipts never have been more than $4 million. Jackie, who has owned all of Menifee’s stock since she incorporated it, purchases all of Estill Corporation’s stock in the current year. Estill’s annual gross receipts have been approximately $6 million in recent years. Explain to Jackie how her acquisition of Estill’s stock will affect the AMT that Menifee pays.
C:5-7 Determine whether the following statements relating to the AMT for a corporation are true or false. If false, explain why.
C:5-8 Identify each of the following as a tax preference item (PREF), an AMT adjustment item to calculate preadjustment AMTI (ADJ), an item to adjust from preadjustment AMTI to ACE (ACE), or none of these (NONE):
C:5-9 What adjustment does a corporation make if ACE is more than preadjustment AMTI? If ACE is less than preadjustment AMTI?
C:5-10 Florida Corporation incurs AMT for the first time in the current year. The main reason for incurring the AMT is a $2 million gain on a current year installment sale that Florida is recognizing over ten years for regular tax purposes.
Explain to Florida’s president how the installment sale can cause Florida to incur the AMT, how its treatment for ACE is similar to and different from the E&P treatment with which she is familiar, and whether its ACE treatment will partially or completely reverse in future years.
ACC 455 ACC455 ACC/455 ENTIRE COURSE HELP – UNIVERSITY OF PHOENIX
ACC 455 Week 5 Apply Application Assignment (with Excel File)
This Tutorial contains an Excel File which can be used even if your question Values are different
Week 5 Application
- Julian transferred 100 percent of his stock in Lemon Company to Apricot Corporation in a Type B stock-for stock exchange. In exchange, he received stock in Apricot with a fair market value of $332,500. Julian’s tax basis in the Lemon stock was $665,000. What amount of loss does Julian recognize in the exchange and what is his basis in the Apricot stock he receives?
- Camille transfers property with a tax basis of $1,175 and a fair market value of $1,600 to a corporation in exchange for stock with a fair market value of $1,270 and $330 in cash in a transaction that qualifies for deferral under section 351. Camille also incurred selling expenses of $125. What is the amount realized by Camille in the exchange?
- Celeste transferred 100 percent of her stock in Supply Chain Company to Marketing Corporation in a Type A merger. In exchange, she received stock in Marketing with a fair market value of $632,500 plus $632,500 in cash. Celeste’s tax basis in the Supply Chain stock was $1,425,000. What amount of loss does Celeste recognize in the exchange and what is her basis in the Marketing stock she receives?
- Packard Corporation transferred its 100 percent interest to State Company as part of a complete liquidation of the company. In the exchange, Packard received land with a fair market value of $380,000. Packard’s basis in the State stock was $740,000. The land had a basis to State Company of $562,000. What amount of loss does State recognize in the exchange and what is Packard’s basis in the land it receives?
- Casey transfers property with a tax basis of $2,840 and a fair market value of $6,600 to a corporation in exchange for stock with a fair market value of $4,800 and $450 in cash in a transaction that qualifies for deferral under section 351. The corporation assumed a liability of $1,350 on the property transferred. Casey also incurred selling expenses of $372. What is the amount realized by Casey in the exchange?
- Antoine transfers property with a tax basis of $591 and a fair market value of $623 to a corporation in exchange for stock with a fair market value of $608 in a transaction that qualifies for deferral under section 351. The corporation assumed a liability of $15 on the property transferred. What is Antoine’s tax basis in the stock received in the exchange?
- Rachelle transfers property with a tax basis of $1,085 and a fair market value of $1,450 to a corporation in exchange for stock with a fair market value of $805 and $110 in cash in a transaction that qualifies for deferral under section 351. The corporation assumed a liability of $535 on the property transferred. What is the corporation’s tax basis in the property received in the exchange?
- Amy transfers property with a tax basis of $945 and a fair market value of $710 to a corporation in exchange for stock with a fair market value of $535 in a transaction that qualifies for deferral under section 351. The corporation assumed a liability of $175 on the property transferred. What is Amy’s tax basis in the stock received in the exchange?
- Simone transferred 100 percent of her stock in Purple Company to Plum Corporation in a Type A merger. In exchange, she received stock in Plum with a fair market value of $520,000 plus $520,000 in cash. Simone’s tax basis in the Purple stock was $225,000. What amount of gain does Simone recognize in the exchange and what is her basis in the Plum stock she receives?
- Red Blossom Corporation transferred its 40 percent interest to Tea Company as part of a complete liquidation of the company. In the exchange, Red Blossom received land with a fair market value of $632,000. The corporation’s basis in the Tea Company stock was $332,000. The land had a basis to Tea Company of $840,000. What amount of gain does Red Blossom recognize in the exchange and what is its basis in the land it receives?
- Gerald received a one-third capital and profit (loss) interest in XYZ Limited Partnership (LP). In exchange for this interest, Gerald contributed a building with a FMV of $20,000. His adjusted basis in the building was $10,000. In addition, the building was encumbered with a $6,000 nonrecourse mortgage that XYZ, LP assumed at the time the property was contributed. What is Gerald’s outside basis immediately after his contribution?
- Styling Shoes, LLC filed its 20X8 Form 1065 on March 15, 20X9. Styling had three members with the following ownership interests and tax basis at the beginning of the 20X8: (1) Jane, a member with a 25% profits and capital interest and a $14,500 outside basis, (2) Joe, a member with a 45% profits and capital interest and a $19,500 outside basis, and (3) Jack, a member with a 30% profits and capital interest and a $11,500 outside basis. The following items were reported on Styling’s Schedule K for the year: ordinary income of $119,000, Section 1231 gain of $24,500, charitable contributions of $34,500, and tax-exempt income of $12,500. In addition, Styling received an additional bank loan of $21,500 during 20X8. What is Jane’s tax basis after adjustment for her share of these items?
- Jerry, a partner with 30% capital and profit interest, received his Schedule K-1 from Plush Pillows, LP. At the beginning of the year, Jerry’s tax basis in his partnership interest was $56,000. His current year Schedule K-1 reported an ordinary loss of $21,000, long-term capital gain of $3,600, qualified dividends of $2,600, $1,100 of non-deductible expenses, a $16,000 cash contribution, and a reduction of $4,600 in his share of partnership debt. What is Jerry’s adjusted basis in his partnership interest at the end of the year?
- Kim received a 1/3 profits and capital interest in Bright Line, LLC in exchange for legal services she provided. In addition to her share of partnership profits or losses, she receives a $27,000 guaranteed payment each year for ongoing services she provides to the LLC. For X4, Bright Line reported the following revenues and expenses: Sales – $147,000, Cost of Goods Sold – $87,000, Depreciation Expense – $42,000, Long-Term Capital Gains – $12,000, Qualified Dividends – $5,700, and Municipal Bond Interest – $3,700. How much ordinary business income (loss) will Bright Line allocate to Kim on her Schedule K-1 for X4?
- Tom is talking to his friend Bob, who has an interest in Freedom, LLC, about purchasing his LLC interest. Bob’s outside basis in Freedom, LLC is $8,500. This includes his $2,200 one-fourth share of the LLC’s debt. Bob’s 704(b) capital account is $15,500. If Tom bought Bob’s LLC interest for $14,000, what would Tom’s outside basis be in Freedom, LLC?
- On 12/31/X4, Zoom, LLC reported a $46,500 loss on its books. The items included in the loss computation were $21,000 in sales revenue, $6,000 in qualified dividends, $13,000 in cost of goods sold, $41,000 charitable contribution, $11,000 in employee wages, and $8,500 of rent expense. How much ordinary business income (loss) will Zoom report on its X4 return?
- John, a limited partner of Candy Apple, LP, is allocated $32,000 of ordinary business loss from the partnership. Before the loss allocation, his tax basis is $22,000 and at-risk amount is $12,000. John also has ordinary business income of $22,000 from Sweet Pea, LP as a general partner and ordinary business income of $8,200 from Red Tomato, as a limited partner. How much of the $32,000 loss from Candy Apple can John deduct currently?
- Frank and Bob are equal members in Soxy Socks, LLC. When forming the LLC, Frank contributed $51,000 in cash and $51,000 worth of equipment. Frank’s adjusted basis in the equipment was $36,000. Bob contributed $51,000 in cash and $51,000 worth of land. Bob’s adjusted basis in the land was $29,000. On 3/15/X4, Soxy Socks sells the land Bob contributed for $59,000. How much gain (loss) related to this transaction will Bob report on his X4 return?
- Erica and Brett decide to form their new motorcycle business as an LLC. Each will receive an equal profits (loss) interest by contributing cash, property, or both. In addition to the members’ contributions, their LLC will obtain a $53,000 nonrecourse loan from First Bank at the time it is formed. Brett contributes cash of $6,500 and a building he bought as a storefront for the motorcycles. The building has a FMV of $48,000, an adjusted basis of $33,000, and is secured by a $38,000 nonrecourse mortgage that the LLC will assume. What is Brett’s outside tax basis in his LLC interest?
- Sue and Andrew form SA general partnership. Each person receives an equal interest in the newly created partnership. Sue contributes $26,000 of cash and land with a FMV of $71,000. Her basis in the land is $36,000. Andrew contributes equipment with a FMV of $28,000 and a building with a FMV of $49,000. His basis in the equipment is $24,000, and his basis in the building is $36,000. How much gain must the SA general partnership recognize on the transfer of these assets from Sue and Andrew?
Week 5 Application
- Julian transferred 100 percent of his stock in Lemon Company to Apricot Corporation in a Type B stock-for stock exchange. In exchange, he received stock in Apricot with a fair market value of $332,500. Julian’s tax basis in the Lemon stock was $665,000. What amount of loss does Julian recognize in the exchange and what is his basis in the Apricot stock he receives?
- Camille transfers property with a tax basis of $1,175 and a fair market value of $1,600 to a corporation in exchange for stock with a fair market value of $1,270 and $330 in cash in a transaction that qualifies for deferral under section 351. Camille also incurred selling expenses of $125. What is the amount realized by Camille in the exchange?
- Celeste transferred 100 percent of her stock in Supply Chain Company to Marketing Corporation in a Type A merger. In exchange, she received stock in Marketing with a fair market value of $632,500 plus $632,500 in cash. Celeste’s tax basis in the Supply Chain stock was $1,425,000. What amount of loss does Celeste recognize in the exchange and what is her basis in the Marketing stock she receives?
- Packard Corporation transferred its 100 percent interest to State Company as part of a complete liquidation of the company. In the exchange, Packard received land with a fair market value of $380,000. Packard’s basis in the State stock was $740,000. The land had a basis to State Company of $562,000. What amount of loss does State recognize in the exchange and what is Packard’s basis in the land it receives?
- Casey transfers property with a tax basis of $2,840 and a fair market value of $6,600 to a corporation in exchange for stock with a fair market value of $4,800 and $450 in cash in a transaction that qualifies for deferral under section 351. The corporation assumed a liability of $1,350 on the property transferred. Casey also incurred selling expenses of $372. What is the amount realized by Casey in the exchange?
- Antoine transfers property with a tax basis of $591 and a fair market value of $623 to a corporation in exchange for stock with a fair market value of $608 in a transaction that qualifies for deferral under section 351. The corporation assumed a liability of $15 on the property transferred. What is Antoine’s tax basis in the stock received in the exchange?
- Rachelle transfers property with a tax basis of $1,085 and a fair market value of $1,450 to a corporation in exchange for stock with a fair market value of $805 and $110 in cash in a transaction that qualifies for deferral under section 351. The corporation assumed a liability of $535 on the property transferred. What is the corporation’s tax basis in the property received in the exchange?
- Amy transfers property with a tax basis of $945 and a fair market value of $710 to a corporation in exchange for stock with a fair market value of $535 in a transaction that qualifies for deferral under section 351. The corporation assumed a liability of $175 on the property transferred. What is Amy’s tax basis in the stock received in the exchange?
- Simone transferred 100 percent of her stock in Purple Company to Plum Corporation in a Type A merger. In exchange, she received stock in Plum with a fair market value of $520,000 plus $520,000 in cash. Simone’s tax basis in the Purple stock was $225,000. What amount of gain does Simone recognize in the exchange and what is her basis in the Plum stock she receives?
- Red Blossom Corporation transferred its 40 percent interest to Tea Company as part of a complete liquidation of the company. In the exchange, Red Blossom received land with a fair market value of $632,000. The corporation’s basis in the Tea Company stock was $332,000. The land had a basis to Tea Company of $840,000. What amount of gain does Red Blossom recognize in the exchange and what is its basis in the land it receives?
- Gerald received a one-third capital and profit (loss) interest in XYZ Limited Partnership (LP). In exchange for this interest, Gerald contributed a building with a FMV of $20,000. His adjusted basis in the building was $10,000. In addition, the building was encumbered with a $6,000 nonrecourse mortgage that XYZ, LP assumed at the time the property was contributed. What is Gerald’s outside basis immediately after his contribution?
- Styling Shoes, LLC filed its 20X8 Form 1065 on March 15, 20X9. Styling had three members with the following ownership interests and tax basis at the beginning of the 20X8: (1) Jane, a member with a 25% profits and capital interest and a $14,500 outside basis, (2) Joe, a member with a 45% profits and capital interest and a $19,500 outside basis, and (3) Jack, a member with a 30% profits and capital interest and a $11,500 outside basis. The following items were reported on Styling’s Schedule K for the year: ordinary income of $119,000, Section 1231 gain of $24,500, charitable contributions of $34,500, and tax-exempt income of $12,500. In addition, Styling received an additional bank loan of $21,500 during 20X8. What is Jane’s tax basis after adjustment for her share of these items?
- Jerry, a partner with 30% capital and profit interest, received his Schedule K-1 from Plush Pillows, LP. At the beginning of the year, Jerry’s tax basis in his partnership interest was $56,000. His current year Schedule K-1 reported an ordinary loss of $21,000, long-term capital gain of $3,600, qualified dividends of $2,600, $1,100 of non-deductible expenses, a $16,000 cash contribution, and a reduction of $4,600 in his share of partnership debt. What is Jerry’s adjusted basis in his partnership interest at the end of the year?
- Kim received a 1/3 profits and capital interest in Bright Line, LLC in exchange for legal services she provided. In addition to her share of partnership profits or losses, she receives a $27,000 guaranteed payment each year for ongoing services she provides to the LLC. For X4, Bright Line reported the following revenues and expenses: Sales – $147,000, Cost of Goods Sold – $87,000, Depreciation Expense – $42,000, Long-Term Capital Gains – $12,000, Qualified Dividends – $5,700, and Municipal Bond Interest – $3,700. How much ordinary business income (loss) will Bright Line allocate to Kim on her Schedule K-1 for X4?
- Tom is talking to his friend Bob, who has an interest in Freedom, LLC, about purchasing his LLC interest. Bob’s outside basis in Freedom, LLC is $8,500. This includes his $2,200 one-fourth share of the LLC’s debt. Bob’s 704(b) capital account is $15,500. If Tom bought Bob’s LLC interest for $14,000, what would Tom’s outside basis be in Freedom, LLC?
- On 12/31/X4, Zoom, LLC reported a $46,500 loss on its books. The items included in the loss computation were $21,000 in sales revenue, $6,000 in qualified dividends, $13,000 in cost of goods sold, $41,000 charitable contribution, $11,000 in employee wages, and $8,500 of rent expense. How much ordinary business income (loss) will Zoom report on its X4 return?
- John, a limited partner of Candy Apple, LP, is allocated $32,000 of ordinary business loss from the partnership. Before the loss allocation, his tax basis is $22,000 and at-risk amount is $12,000. John also has ordinary business income of $22,000 from Sweet Pea, LP as a general partner and ordinary business income of $8,200 from Red Tomato, as a limited partner. How much of the $32,000 loss from Candy Apple can John deduct currently?
- Frank and Bob are equal members in Soxy Socks, LLC. When forming the LLC, Frank contributed $51,000 in cash and $51,000 worth of equipment. Frank’s adjusted basis in the equipment was $36,000. Bob contributed $51,000 in cash and $51,000 worth of land. Bob’s adjusted basis in the land was $29,000. On 3/15/X4, Soxy Socks sells the land Bob contributed for $59,000. How much gain (loss) related to this transaction will Bob report on his X4 return?
- Erica and Brett decide to form their new motorcycle business as an LLC. Each will receive an equal profits (loss) interest by contributing cash, property, or both. In addition to the members’ contributions, their LLC will obtain a $53,000 nonrecourse loan from First Bank at the time it is formed. Brett contributes cash of $6,500 and a building he bought as a storefront for the motorcycles. The building has a FMV of $48,000, an adjusted basis of $33,000, and is secured by a $38,000 nonrecourse mortgage that the LLC will assume. What is Brett’s outside tax basis in his LLC interest?
- Sue and Andrew form SA general partnership. Each person receives an equal interest in the newly created partnership. Sue contributes $26,000 of cash and land with a FMV of $71,000. Her basis in the land is $36,000. Andrew contributes equipment with a FMV of $28,000 and a building with a FMV of $49,000. His basis in the equipment is $24,000, and his basis in the building is $36,000. How much gain must the SA general partnership recognize on the transfer of these assets from Sue and Andrew?
