(TCO 7) Aretha and Alan formed the AA Partnership. Aretha contributed $50,000 cash in exchange for her 50%

/in /by

(TCO 7) Aretha and Alan formed the AA Partnership. Aretha contributed $50,000 cash in exchange for her 50%

interest in the partnership capital and profits. During the first year of partnership operations, the following events occurred: the partnership had net taxable income of $70,000, Aretha received a distribution of $17,000 cash from the partnership, and she had a 50% share in the $40,000 of partnership recourse liabilities on the last day of the partnership year. Which of the following is Aretha’s adjusted basis for her partnership interest at year end?(Points : 5

 
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$54,750 $16,250

/in /by

$54,750$16,250

 
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(TCO 9) Harold and Iris are married and live in Maine. In 1990, they purchased realty for $100,000

/in /by

(TCO 9) Harold and Iris are married and live in Maine. In 1990, they purchased realty for $100,000 (Iris

provided $80,000 and Harold $20,000) and listed ownership as joint tenants with right of survivorship. In the current year, Harold dies first when the realty is worth $500,000. Which is one result of these events? (Points : 5)

        Harold’s gross estate includes $250,000.
Harold’s gross estate includes $100,000.
Harold’s gross estate includes $400,000.
In 1990, Iris made a gift to Harold of $60,000.
None of the above

 
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Stuart has an interest expense deduction in regard to the interest element

/in /by

Stuart has an interest expense deduction in regard to the interest element.Alan may be

allowed an income tax deduction in regard to the interest element.

Stuart has interest income in regard to the interest element.

 
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