Exam 14: Forming and Operating Partnerships

Frank and Bob are equal members in Soxy Socks,LLC.When forming the LLC,Frank contributed $50,000 in cash and $50,000 worth of equipment.Frank's adjusted basis in the equipment was $35,000.Bob contributed $50,000 in cash and $50,000 worth of land.Bob's adjusted basis in the land was $30,000.On 3/15/X4,Soxy Socks sells the land Bob contributed for $60,000.How much gain (loss)related to this transaction will Bob report on his X4 return?

Which of the following statements regarding a partner's basis adjustments is true?

If a taxpayer sells a passive activity with suspended passive activity losses from prior years,what type of income can be offset by the suspended passive losses in the year of sale?

Which of the following would not be classified as a separately stated item?

Nonrecourse debt is generally allocated according to the profit-sharing ratios of the partnership.

Adjustments to a partner's outside basis are made annually to prevent double taxation on the sale of a partnership interest or at the time of a partnership distribution.