a.
Introduction:
The amount that V has at risk immediately after the capital contribution.
b.
Introduction: Partnership forms when more than one person thrives to achieve the same objective as a business. The only difference between a partnership and a corporation is that the corporation will enjoy the benefits of limited liability but faces dual taxation first at the company level and second at the shareholders level, whereas in partnership, partnerships are taxed only at the partners level. Registration of partnership is not mandatory as it can be formed by mere handshake only. To carry a partnership with limited liability, it is important to register the business as a “limited liability partnership”.
The amount of loss that V can deduct in 2019, if V’s share of the loss from the partnership is $100,000 and assume that V has sufficient income.
c.
Introduction: Partnership forms when more than one person thrives to achieve the same objective as a business. The only difference between a partnership and a corporation is that the corporation will enjoy the benefits of limited liability but faces dual taxation first at the company level and second at the shareholders level, whereas in partnership, partnerships are taxed only at the partners level. Registration of partnership is not mandatory as it can be formed by mere handshake only. To carry a partnership with limited liability, it is important to register the business as a “limited liability partnership”.
The treatment of the non-deductible part of the loss in Part b.
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Income Tax Fundamentals 2020
- How much is Tony’s share in the net income of the part? Tony and Steve formed a partnership on January 1, 2019. Their partnership earned a net income of 1,800,000 for the year ended 2019. The following stipulation are found in their articles of partnership: Tony is the receive a monthly salary of P25,000 as compensation for his managing duties in the partnership Steve is the receive an annual salary of P180,000 from the partnership Bonus of 15% is granted to Tony if the partnership income exceeds P1,000,000 (Bonus is computed based on the excess from P1,000,000) Each partner is to receive an interest of 10% based on their weighted average capital balances The remaining balance is divided accordingly to Tony and Steve in the ratio of 2:3 The following are the capital transaction of the partners: Tony Steve Debit Credit Debit Credit 1-Jan 600,000 700,000 1-Mar 120,000 1-Apr 300,000 1-Jul 200,000…arrow_forwardNadine and Liza formed a partnership on January 1, 2019 below the details of your capital accounts for 2019: On the saviour the partnership gathered a profit of 200,000. Determine the profit ratio and the share on profits for nadine and liza on the following agreements: If agreement based on capital contributions:Nadine's Profit ratio?Nadine's Share on profit?Liza's Profit ratio?Liza's Share on profit? If agreement based on average capital:Nadine's Profit ratio?Nadine's Share on profit?Liza's Profit ratio?Liza's Share on profit?arrow_forward8. How much is Tony's share in the net income of the partnership? Tony and Steve formed a partnership on January 1, 2019. Their partnership earned a net income of 1,800,000 for the year ended 2019. The following stipulations are found in their articles of partnership: • Tony is the receive a monthly salary of P25,000 as compensation for his managing duties in the partnership Steve is the receive an annual salary of P180,000 from the partnership Bonus of 15% is granted to Tony if the partnership income exceeds P1,000,000 (Bonus is computed based on the excess from P1M) partner is to receive an interest of 10% based on their weighted average capital balances. The remaining balance is divided accordingly to Tony and Steve in the ratio of 2:3 The following are the capital transactions of the partners: Each Tony Steve Debit Credit Debit Credit 1-Jan 600,000 700,000 1-Mar 120,000 1-Apr 1-Jul 1-Sep 30-Sep 300,000 200,000 90,000 240,000 30-Oct 150,000arrow_forward
- Individual Income TaxesAccountingISBN:9780357109731Author:HoffmanPublisher:CENGAGE LEARNING - CONSIGNMENT