On the first day of the partnership’s tax year, James purchases a 40% interest in Madison Partnership for $30,000 cash. The partnership has $40,000 in liabilities when James enters the partnership. Partners share the risk of loss from liabilities in the same way they share partnership income and losses. During 2025, the partnership incurs a $150,000 loss and a $20,000 increase in liabilities. How much of the loss can James report on his tax return for 2025?

The Harrison Partnership has a machine with an FMV of $25,000 and a basis of $20,000. The partnership has taken an $8,000 depreciation on the machine. The partnership has hot assets of

A new partner, Margaret, contributes cash and assumes a share of Taylor Partnership liabilities. Zachary’s interest in the partnership is reduced by 5% due to the admission of Margaret. The partnership liabilities at the time Margaret is admitted are $200,000 and the partners share the economic risk of loss in the same way they share partnership profits. Zachary’s basis in the partnership interest prior to Margaret’s admission is $5,000. Due to the admission of Margaret, partner Zachary has

On January 1, 2025 Andrew received a 60% interest in Jackson Partnership in exchange for $2,000 in cash and real property with a $3,000 basis. The real property was secured by a $2,000 mortgage. Jackson reported a $15,000 loss for its 2025 tax year. How much loss can Andrew deduct on his 2025 tax return?

Abraham has a basis in his Lincoln Partnership interest of $30,000. He receives a current distribution of $20,000 cash and investment land (FMV $7,000, basis $6,000). His basis in the land is

Grover transferred property with a basis of $200,000 and a fair market value of $310,000 to Cleveland Corporation in exchange for stock with a fair market value of $160,000 and $100,000 in cash in an exchange that qualifies for §351. Cleveland Corporation assumed a liability of $50,000 on the property. What is the gain realized by Grover?

For the year ended December 31, 2025, Jefferson Corporation had a net operating loss of $300,000. Taxable income for the earlier years of corporate existence, computed without reference to the net operating loss, was as follows:2020 – $5,0002021 – $10,0002022 – $20,0002023 – $30,0002024- $40,000What amount of net operating loss will be available to Jefferson for the year ended December 31, 2026?

George transferred his 10% interest to Washington Company as part of a complete liquidation of the company. In the exchange, he received land with a fair market value of $200,000. George’s basis in the Washington stock was $100,000. The land had a basis to Washington Company of $50,000. What amount of gain does Washington recognize in the exchange and what is George’s basis in the land he receives?

John Quincy transfers property ($200,000 FMV; $190,000 A/B) to a newly formed corporation in a transaction that qualifies under §351. John Quincy receives stock with a FMV of $180,000 and $20,000 cash. John Quincy’s basis in the stock is

During the year, Johnson Corporation had the following income and expenses:Operating income – $1,200,000Salaries & wage expense – $600,000Charitable contributions – $90,000Capital gains – $30,000Depreciation expense – $70,000Dividends from a 25% owned corporation – $120,000Dividends received deduction – $78,000Johnson Corporation’s “Taxable Income before Charitable Contribution Deduction” would be: