CPA Study Group
Team up with fellow candidates and conquer your exams.
MY query is the Guaranteed payments are salaries to the partner and deducted from the partnership ordinary income and therefore Partnership Ordinary Income should by 200000-60000=140000 Further, Charitable contributions are shown as a separate stated items on the Schedule k-1 and therefore should not be include in the ordinary income. Therefore partners share of income should be (140000*40%)+(60000)=56000+60000= 116,000
Should legal fees incurred in investments in equity holding less than 20% shares be expensed or capitalized? What about legal/consultant fees incurred in trading securities, AFS and HTM?
If the initial basis is 13000 and the company distributes 4000 cash that brings the basis down to 9000. Then there is a distribution of land with a FMV of 17000, however, the investors basis cannot be negative so shouldnt the basis in the land be 9000? Is this part of the new testing material starting January 1 2019?