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Federal Tax and ALF Partnership

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(Question 1)
During the current year, ALF Partnership reported the following items of receipts and expenditures: $200,000 sales, $10,000 utilities, $12,000 rent, $50,000 salaries to employees, $30,000 guaranteed payment to partner Lloyd, investment interest income of $3,000, a charitable contribution of $5,000, and a distribution of $10,000 to partner Frank. Arnold is a 40% partner. What items will be reflected on Arnold's Schedule K-1?

(Question2)
Denise invested $30,000 this year to purchase a 20% interest in the DEF Partnership. The partnership reported $100,000 of net income from operations, a $6,000 short-term capital loss, and a $2,000 charitable contribution. In addition, the partnership distributed $10,000 to Denise and $20,000 each to partners Ed and Fran. Assuming the partnership has no beginning or ending liabilities, what is Denise's basis in her partnership interest at the end of the year?

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Solution Summary

This solution shows which items will be reflected on Arnold's schedule K-1 from ALF partnership. This solution also calculates Denise's basis in her partnership interest at the end of the year, from DEF partnership.

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(Question 1)
200000 - 10000 - 12000 - 50000 - 30000 = 98000 x .40 = 39,200
sales - utilities - rent - ...

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