Ernst and Young form the equal EY partnership.  Ernst contri…

Ernst and Young form the equal EY partnership.  Ernst contributes property (FMV = $150,000, basis = $60,000) and Young contributes $150,000 cash.  The property is depreciated straight line over a 10 year life for both book and tax purposes.  The partnership also has other property (FMV = $100,000, basis = $100,000) that is depreciated straight line over 5 years.  Under Code Sec. 704(c), how much of the tax depreciation of the contributed property in the first year will Young get?  Assuming a curative allocation is made, how much will it be?

On December 1 of year 1, Casey buys Nathan’s 1/3 interest in…

On December 1 of year 1, Casey buys Nathan’s 1/3 interest in COB Partnership. COB is a calendar-year partnership with total expenses of $360,000 for the year, $240,000 of which were accrued prior to December 1st. The remaining $120,000 of expense were incurred in December. The partnership’s total income is $360,000, which was earned equally over the taxable year. How much income and expense would Casey be allocated under the interim closing method? 

Brad, Walker, and Mike form the equal BMW partnership with c…

Brad, Walker, and Mike form the equal BMW partnership with cash contributions of $200,000 each. They use the cash to purchase equipment for $600,000.  The equipment has a depreciable life of four years and is depreciated using the straight-line method. Under the partnership agreement, all depreciation is allocated to Brad.  Capital accounts are properly maintained.  Any distributions in liquidation will be made according to the capital accounts of each partner.  Partners are required to restore deficit capital accounts upon liquidation.  Income aside from depreciation is $90,000 each year.  If the partnership were liquidated at the end of year two, how much would each partner get?