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CengageNOWv2 | Online teaching and learning resource from Cengage Leaming 4/25/2018 d. Pay funeral expenses. . All of these choices are correct. 26. MC.20.054 Which of the following taxpayers can be subject to an entity-level Federal income tax? a. Limited liability company b. Partnership. c. Complex trust. they never are subject to an entity-level Federal income d. All of these taxpayers are passthrough entities, and 27. PR.09-37 Problem 9-37 (LO. 5) Blunt, Inc, a u.s. corporation, earned $600,000 in total taxable income including $80,000 in foreign-s Blunt, Inc., a U.S income from its German branch's manufacturing operations and $30,000 in branch's engineering services operations. Blunt paid $32,000 in German income taxes and taxes. foreign-source taxable income from it s Swiss $1,800 in Swiss income Assume the U.S. tax rate is 34%. Blunt's U.S. tax liability (after any available FTC) is $ 28. PR. 10-28 Problem 10-28 (Lo. 3) Emma and Laine form the equal EL Partnership. Emma contributes cash of $100,000. Laine contributes property with an adjusted basis of $40,000 and a fair market value of $100,000. If an amount is zero, enter "O". a. How much gain, if any, must Emma and Laine recognize on the contributions? Emma recognizes a gain of $ on the transfer and Laine recognizes a gain of b. Emma's basis in her partnership interest is s c. Laine's basis in her partnership interest is d. The partnership will take a $ basis in the assets it receives 29. PR.11-35.Algo (Algorithmic) Problem 11-35 (Algorithmic) (LO. 3) In each of the following four independent liquidating distributions scenarios, the partnership also liquidates. For each, determine the amount and character of any gain or loss to be recognized by each partner and the basis of each asset (other than cash) received.

Explanation / Answer

27.

Taxable income = $600,000

Tax rate = 34%

Tax on income = 600,000*34% = $204,000

Allowed FTC = 32,000 + 1,800 = $33,800

Tax liability = $170,200

28.

(a) There is no gain/loss to be recognized for the contributions. So, answer is $0 for both.

(b) Emma basis = Cash contribution = $100,000

(c) Laine basis = Property with adjusted basis = $40,000

(d) The partnership will take $40,000 basis in the assets it received.

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