Cliff’s basis in his Aero Partnership interest is $18,500. Cliff receives a distribution of $24,100 cash from Aero in complete liquidation of his interest. Aero is an equal partnership with the following balance sheet: Tax Basis FMV Assets: Cash $ 24,100 $ 24,100 Investment 28,800 28,800 Land 2,600 36,700 Totals $ 55,500 $ 89,600 Liabilities and capital: Capital – Chris 18,500 – Cliff 18,500 – Cooper 18,500 Totals $ 55,500 a. If Aero has a §754 election in place, what is the amount of the special basis adjustment?

Riff, Incorporated is working on its cash budget for June. The budgeted beginning cash balance is $17,000. Budgeted cash receipts total $189,000 and budgeted cash disbursements total $188,000. The desired ending cash balance is $42,000. The excess (deficiency) of cash available over disbursements for June will be:Multiple Choice$1,000.$206,000.$18,000.$16,000.

Capital EmployedThe balance sheet of Blaze Limited is given below.                  Balance Sheet: Current YearAssets Amount Liabilities and Equity AmountMachinery $20,000.00 Share capital $10,000.00Inventory $2,000.00 Long-term debt $10,000.00Accounts receivable $1,000.00 Short-term debt $3,000.00Cash $2,000.00 Accounts payable $2,000.00Total assets $25,000.00 Total liabilities and equity $25,000.00Calculate the capital employed by the company. $20,000$21,000$27,000$33,000

Alfonso began the year with a tax basis in his partnership interest of $30,000. His share of partnership debt at the beginning and end of the year consists of $4,000 of recourse debt and $6,000 of nonrecourse debt. During the year, he was allocated $40,000 of partnership ordinary business loss. Alfonso does not materially participate in this partnership and he has $1,000 of passive income from other sources. a. How much of Alfonso’s loss limited by his tax basis? b How much of Alfonso’s loss is limited by his at-risk amount? c. How much of Alfonso’s loss is limited by the passive activity loss rules?

The balance sheet of Blaze Limited is given below.                  Balance Sheet: Current YearAssets Amount Liabilities and Equity AmountMachinery $20,000.00 Share capital $10,000.00Inventory $2,000.00 Long-term debt $10,000.00Accounts receivable $1,000.00 Short-term debt $3,000.00Cash $2,000.00 Accounts payable $2,000.00Total assets $25,000.00 Total liabilities and equity $25,000.00Calculate the capital employed by the company.

Alfonso began the year with a tax basis in his partnership interest of $28,000. His share of partnership debt at the beginning and end of the year consists of $6,000 of recourse debt and $8,000 of nonrecourse debt. During the year, he was allocated $45,000 of partnership ordinary business loss. Alfonso does not materially participate in this partnership and he has $4,000 of passive income from other sources. a. How much of Alfonso’s loss limited by his tax basis? b How much of Alfonso’s loss is limited by his at-risk amount? c. How much of Alfonso’s loss is limited by the passive activity loss rules?