Assignment task:
Julie Simmons had a 60% interest in capital and profits of Tri-State Partnership.
This document shows how Tri-State distributed assets to Julie.
You are charged to determine the basis and return effects of the provided transactions on Julie's basis in her partnership interest and her tax return. In addition, determine her basis in any property received as a distribution from the partnership.
Prepare Tax Work papers for Julie that includes the supporting calculations in Excel for the partner's basis and tax return effects.
Julie Simmons had a 60% interest in capital and profits of Tri-State Partnership. Her basis for this interest at the beginning of 2022 was $5,700.
During the year, the Tri-State distributed the following assets to Julie.
Basis Fair Market Value
Cash $2,000 $2,000
Machinery $4,900 $6,100
Inventory $1,500 $2,000
Office Equipment $3,000 $4,300
Julie also received a guaranteed payment from the partnership in the amount of $3,000 for management services that she provided. In addition, the partnership had operating income of $10,000 (before considering any of these other transactions) and LTCLs of $20,000.
Calculations for each part in Excel