Under FIN No. 48, if a company thinks there is a very low li…
Under FIN No. 48, if a company thinks there is a very low likelihood the company will be selected for audit, there is no need to consider the technical merits of whether or not the tax benefits it claims could be overturned under audit when measuring the amount of tax benefits that should be recognized vs. unrecognized.
Read DetailsBrittany and Jeanette form a partnership called the Chipette…
Brittany and Jeanette form a partnership called the Chipettes Ltd. making custom granola. Both partners have a 50% profits interest. Ignore the additional information (and answer) in the prior problem and assume that after all ordinary income is allocated to both partners, they each have $400,000 of outside basis in the partnership.If the partnership decides to payoff $100,000 in principal on a non-recourse loan that had contributed to the $400,000 basis for the partners, what would Brittany’s ending outside basis be after the principal was paid off?
Read DetailsSteve and Alex decide to form a partnership called Minecraft…
Steve and Alex decide to form a partnership called Minecraft Ltd. Both partners receive a 50% profits interest in the partnership. Ignoring answers and information in prior problems, assume that Steve and Alex have beginning outside basis in the partnership of $1,000,000 each before either considering doing any service for the partnership.If Steve decides to perform service for the partnership and asks for Alex to give him $200,000 of his capital interest as compensation for this service, how much of the $200,000 increase in capital interest is considered taxable income to Steve?
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