Michael Invests in Buxus Interests, a Partnership

question 59

Essay

Michael invests in Buxus Interests, a partnership.Michael's capital contribution to the partnership consists of $10,000 cash and equipment with an adjusted basis of $120,000 (fair market value of $150,000)subject to a nonrecourse liability of $60,000.
a.Calculate the amount that Michael is at-risk in the activity after making the above contribution?
b.​​If Michael's share of the partnership loss in the year after he makes the contribution is$150,000, how much of the loss may be deducted in that year (before considering thelimitations on passive losses)? Assume the partnership had no other transactions.
c.If Michael has any nondeductible loss in part b, what may Michael do with thenondeductible loss?

Identify and apply the appropriate recognition and measurement principles for assets, liabilities, and contingent liabilities in a business combination.

Understand the concept and accounting treatment of goodwill in business combinations.

Recognize the importance of fair value measurement in the recognition and measurement of assets and liabilities acquired in a business combination.

Understand the role and determination of the acquisition date in a business combination.

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Definitions:

Non-Client

An individual or entity that does not have a professional agreement or service relationship with a particular service provider or firm.

Working Papers

Documents prepared or obtained by auditors during a financial audit, which serve as the basis for their findings and conclusions.

Accountant's Property

This term is not standard; it might refer to assets or property managed or overseen by an accountant but lacks a clear, established definition. NO.

Right of Access

A legal or policy-based entitlement allowing individuals to obtain information or enter a place.