Complete each of the following case scenarios.Case 1DEF Services is owned by individuals, Mac, Norm, Otto, and Paul. They share profits and losses 40:30:15:15. Mac and Norm have tax years ending...

Complete each of the following case scenarios.

Case 1

DEF Services is owned by individuals, Mac, Norm, Otto, and Paul. They share profits and losses 40:30:15:15. Mac and Norm have tax years ending 6/30. Otto and Paul use the calendar year.

The partnership's activities for the tax year ending 6/30/-Y2 are:

Tasks:

1. Allocate the partnership's income and other receipts/payments to its four partners for their tax years ending in Year 2.




2. Mac received guaranteed payments of $12,000 per month through the year ending 6/30/ (Y2). Norm received guaranteed payments of $1,500 per month for the year ending 6/30/-Y2. Otto and Paul each receive capital account withdrawals of $7,500 per month. Allocate the partnership's income and other receipts/payments to its four partners for their tax years ending in Y2.

Case 2

Three individuals form the ABC partnership and each contribute the following to form the partnership:

• Cash: $35,000.00




• Future services to be rendered to the partnership worth: $350,000




• Real property with a basis of $300,000.00 and a fair market value of $350,000.00.

Tasks:

1. What is each partner's original basis in the partnership interest?




2. What is the partnership's basis in each partner's contribution?

Case 3

Greg owns a 50 percent share of the Rich and Greg RG law firm partnership. Both partners and the entity are on the calendar year for tax purposes. Greg's basis in the partnership interest at the beginning of the year is $300,000. The partnership's relevant data for year 1 includes the following:

• Partnership ordinary income $500,000




• Partnership municipal bond interest $100,000




• Greg capital; account withdrawals $250,000




• December 31st (end of year) cash distribution to the partners $150,000




• December 31st (end of year) property distribution to Greg: fair-market value $30,000




• Basis $25,000




• Partnership's liabilities January 1st (beginning of year) $20,000




• Partnership's liabilities December 31st (end of year) $100,000

Tasks:

1. What is Greg's basis in the partnership before the December 31st distributions?




2. What is Greg's basis in the property distributed?

Submission Details:

• Submit your answers in a Microsoft Excel spreadsheet.