6. Rich is a 25% partner in RITZ General Partnership. At the beginning of 2020,...
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6. Rich is a 25% partner in RITZ General Partnership. At the beginning of 2020, RITZ had $100,000 in liabilities and Rich's basis (including his share of the liabilities) in his partnership interest was $120,000. At the end of 2020, RITZ's liabilities had increased to $120,000.
2020 Activity:
Sales $220,000 COGS $83,000
Depreciation Expense $25,000
Administrative Expense $12,000
Guaranteed Payment to Rich $30,000
1231 Gain $12,000 1245 Gain $10,000
STCL from sale of stock $5,000
LTCL from sale of stock $6,000
LTCG from sale of stock $14,000
Charitable Contribution $4,000
a. Compute RITZ's Ordinary income and Separately Stated Items.
b. Compute Rich's basis at the end of 2020.
c. What would Rich report on his 2020 individual tax return as a result of RITZ's activities?
d. How much of Richs income from RITZ would be subject to self-employment tax?
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