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Barack and Michelle are both 25% owner/managers for Obama Enterprises.  Barack runs the retail store in Little Rock, AR.  Michelle runs the retail store in Fayetteville, AR.  Obama Enterprises generated a $135,000 profit companywide made up of a $75,000 profit from the Little Rock store, a ($25,000) loss from the Fayetteville store, and a combined $85,000 profit from the remaining stores.  If Obama Enterprises is taxed as a partnership and decides that Barack and Michelle will be allocated 70% of their own store’s profit with the remaining profits allocated pro rata among all the owners, how much income will be allocated to Barack?

Martin purchases a 50% interest in Van Buren Partnership for $30,000 cash on the first day of the partnership’s tax year, . The partnership has $40,000 in liabilities when Martin enters the partnership. Partners share the risk of loss from liabilities in the same way they share partnership income and losses. During 2025, the partnership incurs a $120,000 loss and a $20,000 increase in liabilities. How much of the loss can Martin report on his tax return for 2025?

Franklin owns a 25% interest in Pierce Partnership. On January 1, 2025 Franklin had a basis in his partnership interest of $5,000. For 2025 Pierce Partnership reported the following items: Ordinary business income – $100,000; §1231 gain – $15,000; Charitable contributions – $25,000; Tax-exempt income – 3,000; Pierce Partnership bank loan – $12,000. What is Franklin’s outside basis after adjustment for his share of these items? 

The Harrison Partnership has a machine with an FMV of $25,000 and a basis of $20,000. The partnership has taken an $8,000 depreciation on the machine. The partnership has hot assets of

William Henry has a 50% interest in Harrison Partnership. The basis for his partnership interest is $50,000. The partners share the economic risk of loss from liabilities in the same way they share partnership income and losses. William Henry receives a distribution of land that has an FMV of $40,000 and an adjusted basis of $30,000. The land is subject to a $25,000 liability, which William Henry assumes. His basis in the partnership interest following the land distribution is

Fillmore Corporation, a calendar-year S corporation, has been an S corporation since its inception. In 2025 Fillmore recorded the following: Gross receipts – $60,000; Dividend income – $18,000; Supplies expense – $2,000; Utilities expense – $1,500. What amount of income should be separately stated on Fillmore’s 2025 S corporation Schedule K? 

Thomas owns a 35% interest in Jefferson Partnership. On January 1, 2025 Thomas had a basis in his partnership interest of $5,000. For 2025 Jefferson Partnership reported the following items. What is Thomas’s outside basis after adjustment for his share of these items?    Ordinary business income $ 100,000   §1231 gain     15,000   Charitable contributions     25,000   Tax-exempt income       3,000   Additional Jefferson Partnership bank loan     12,000   

The Polk Partnership balance sheet (cash method) includes the following assets on December 31, 2025. James, a 1/3 partner, has an adjusted basis of $90,000 for his partnership interest. If James sells his entire partnership interest to Sarah for $100,000 cash, what is the amount and character of James’s gain or loss from the sale?      Basis FMV   Cash $ 180,000 $ 180,000   Accounts receivable -0- 60,000   Land     90,000   120,000       Total $ 270,000 $ 360,000   

Abraham has a basis in his Lincoln Partnership interest of $30,000. He receives a current distribution of $20,000 cash and investment land (FMV $7,000, basis $6,000). His basis in the land is

Martin has a 30% interest in the Van Buren Partnership and receives a guaranteed payment of $30,000. In 2025, Van Buren reports ordinary income of $25,000 and capital gains of $60,000 before taking into account Martin’s guaranteed payment. What is the amount and character of all income or loss that Martin must report as a result of partnership activities?