Determine how much gain or loss must be recognized on a distribution, ending partnership basis, and basis in equipment.

Preparation

Corporate and partnership tax preparation require highly developed skills in research and analysis. Consider the following problems and research the applicable tax regulations to answer the questions.

Instructions

For this assessment, complete the following:

• Download Assessment 7 Problems [DOCX].
• Using the primary source of IRS.gov and the IRS Interactive Tax Assistant and Tax Trails, locate and interpret regulations and publications that relate to each problem.
• Record your answers to the problems in a Word document.
• Provide an explanation for each answer, including any related calculations and evidence.
• Include the following criteria from the scoring guide in your responses.
  • Determine partners’ recognized gains, explaining how much they gained and the rationale.
  • Prepare self-employment income and basis at the end of the year.
  • Determine how much gain or loss must be recognized on a distribution, ending partnership basis, and basis in equipment.
  • Calculate the gain or loss on the sale of a partnership interest.
  • Determine the basis of the stock in the hands of the shareholder.
  • Determine taxable income on a C corporation and the book income.
  • Determine the amount of taxable dividend, nontaxable distribution, and capital gain.
• Submit the Word document containing your answers to the problem and the explanations for your answers.

Competencies Measured

By successfully completing this assessment, you will demonstrate your proficiency in the following course competencies and assessment criteria:

• Competency 3: Assess types of non-individual entities subject to federal taxation.
  • Determine partners’ recognized gains, explaining how much they gained and the rationale.
  • Prepare self-employment income and basis at the end of the year.
  • Determine how much gain or loss must be recognized on a distribution, ending partnership basis, and basis in equipment.
  • Calculate the gain or loss on the sale of a partnership interest.
  • Determine the basis of the stock in the hands of the shareholder.
  • Determine taxable income on a C corporation and the book income.
  • Determine the amount of taxable dividend, nontaxable distribution, and capital gain.