Individual Income Taxes
43rd Edition
ISBN: 9780357109731
Author: Hoffman
Publisher: CENGAGE LEARNING - CONSIGNMENT
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Question
Chapter 7, Problem 42P
To determine
State the implications of the loss for Person T and Person P.
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In the early part of 2021, the partners of Hugh, Jacobs, and Thomas sought assistance from a local accountant. They had begun a new
business in 2020 but had never used an accountant's services.
Hugh and Jacobs began the partnership by contributing $155,000 and $105,000 in cash, respectively. Hugh was to work occasionally
at the business, and Jacobs was to be employed full-time. They decided that year-end profits and losses should be assigned as
follows:
• Each partner was to be allocated 10 percent interest computed on the beginning capital balances for the period.
• A compensation allowance of $8,000 was to go to Hugh with a $25,000 amount assigned to Jacobs.
• Any remaining income would be split on a 4:6 basis to Hugh and Jacobs, respectively.
In 2020, revenues totaled $180,000, and expenses were $149,000 (not including the partners' compensation allowance). Hugh
withdrew cash of $9,000 during the year, and Jacobs took out $14,000. In addition, the business paid $8,000 for repairs…
In the early part of 2021, the partners of Hugh, Jacobs, and Thomas sought assistance from a local accountant. They had begun a new business in 2020 but had never used an accountant’s services.
Hugh and Jacobs began the partnership by contributing $125,000 and $75,000 in cash, respectively. Hugh was to work occasionally at the business, and Jacobs was to be employed full-time. They decided that year-end profits and losses should be assigned as follows:
Each partner was to be allocated 10 percent interest computed on the beginning capital balances for the period.
A compensation allowance of $7,000 was to go to Hugh with a $21,000 amount assigned to Jacobs.
Any remaining income would be split on a 4:6 basis to Hugh and Jacobs, respectively.
In 2020, revenues totaled $150,000, and expenses were $131,000 (not including the partners’ compensation allowance). Hugh withdrew cash of $7,000 during the year, and Jacobs took out $12,000. In addition, the business paid $8,000 for repairs…
In the early part of 2020, the partners of Manuel, Benjamin, and Solomn went to local accountant seeking assistance. They had begun a new business in 209 but had never previously used the services of accountant. Manuel and Benjamin began the partnership by contributing P 80,000 and P30,000 in cash, respectively. Manuel was to work occasionally at the business whereas Benjamin would be employed full time. They decided that year-end profits and losses should be assigned as follows:
- Each partner was to be allocated 10 percent interest computed on the beginning capital balance for the period.
- A compensation allowance of P5,000 was to go to Manuel with P20,000 amount assigned to Benjamin.
- Any remaining income would be split on a 4:6 basis to Manuel and Bejamin respectively.
In 2019, revenues totalled P90,000 with expenses reported as P64,000 (not including the compensation allowance assigned to the partners). Manuel withdrew cash of P8,000 during the year while Benjamin took out…
Chapter 7 Solutions
Individual Income Taxes
Ch. 7 - Prob. 1DQCh. 7 - Prob. 2DQCh. 7 - Prob. 3DQCh. 7 - Prob. 4DQCh. 7 - Many years ago, Jack purchased 400shares of Canary...Ch. 7 - Scan is in the business of buying and selling...Ch. 7 - Prob. 7DQCh. 7 - Prob. 8DQCh. 7 - Prob. 9DQCh. 7 - Prob. 10DQ
Ch. 7 - Prob. 11DQCh. 7 - Prob. 12DQCh. 7 - Prob. 13DQCh. 7 - Prob. 14DQCh. 7 - Prob. 15DQCh. 7 - Prob. 16DQCh. 7 - Prob. 17DQCh. 7 - Prob. 18DQCh. 7 - Prob. 19DQCh. 7 - Prob. 20DQCh. 7 - Last year Aleshia identified 15,000 as a...Ch. 7 - Prob. 22CECh. 7 - Prob. 23CECh. 7 - Prob. 24CECh. 7 - Prob. 25CECh. 7 - Belinda was involved in a boating accident in...Ch. 7 - Prob. 27CECh. 7 - Prob. 28CECh. 7 - Prob. 29CECh. 7 - Phillis and Trey are married and file a joint tax...Ch. 7 - Emily, who is single, sustains an NOL of 7,800 in...Ch. 7 - Prob. 32PCh. 7 - Monty loaned his friend Ned 20,000 three years...Ch. 7 - Sally is in the business of purchasing accounts...Ch. 7 - Prob. 35PCh. 7 - Prob. 36PCh. 7 - Olaf lives in the state of Minnesota. In 2019, a...Ch. 7 - Prob. 38PCh. 7 - On July 24 of the current year, Sam Smith was...Ch. 7 - Prob. 40PCh. 7 - During 2019, Leisel, a single taxpayer, operates a...Ch. 7 - Prob. 42PCh. 7 - Prob. 43PCh. 7 - Xinran, who is married and files a joint return,...Ch. 7 - During 2019, Rick and his wife, Sara, had the...Ch. 7 - Soong, single and age 32, had the following items...Ch. 7 - Prob. 47PCh. 7 - Prob. 48PCh. 7 - Assume that in addition to the information in...Ch. 7 - Jed, age 55, is married with no children. During...Ch. 7 - Prob. 51CPCh. 7 - Mason Phillips, age 45, and his wife, Ruth, live...Ch. 7 - During 2019, John was the chief executive officer...Ch. 7 - Prob. 2RP
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