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Q: Newton is a one-third owner of ProRite Partnership. Newton

Newton is a one-third owner of ProRite Partnership. Newton has decided to sell his interest in the business to Betty for $50,000 cash plus the assumption of his share of ProRite’s liabilities. Assume...

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Q: Travis and Alix Weber are equal partners in the Tralix Partnership,

Travis and Alix Weber are equal partners in the Tralix Partnership, which does not have a §754 election in place. Alix sells one-half of her interest (25%) to Michael Tomei for $30,000 cash. Just befo...

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Q: Generally, a selling partner’s capital account carries over to the purchaser

Generally, a selling partner’s capital account carries over to the purchaser of the partnership interest. Under what circumstances will this not be the case?

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Q: Franklin, Jefferson, and Washington formed the Independence Partnership (a

Franklin, Jefferson, and Washington formed the Independence Partnership (a calendar-year-end entity) by contributing cash 10 years ago. Each partner owns an equal interest in the partnership. Franklin...

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Q: Marco, Jaclyn, and Carrie formed Daxing Partnership (a calendar

Marco, Jaclyn, and Carrie formed Daxing Partnership (a calendar year-end entity) by contributing cash 10 years ago. Each partner owns an equal interest in the partnership. Marco, Jaclyn, and Carrie ea...

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Q: At the end of last year, Lisa, a 35%

At the end of last year, Lisa, a 35% partner in the five-person LAMEC Partnership, has an outside basis of $60,000 including her $30,000 share of LAMEC debt. On January 1 of the current year, Lisa sel...

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Q: Explain why a partnership might not want to make a §754

Explain why a partnership might not want to make a §754 election to allow special basis adjustments.

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Q: In general terms, how are C corporations different from and similar

In general terms, how are C corporations different from and similar to S corporations?

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Q: Rex and Felix are the sole shareholders of the Dogs and Cats

Rex and Felix are the sole shareholders of the Dogs and Cats Corporation (DCC). After several years of operations using the accrual method, they decided to liquidate the corporation and operate the bu...

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Q: This year Sooner Company reports current E&P of negative $

This year Sooner Company reports current E&P of negative $300,000. Its accumulated E&P at the beginning of the year was $200,000. Sooner distributed $400,000 to its sole shareholder, Boomer Wells, on...

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