A partner's tax capital account balance and book capital account balance may be different because:...
50.1K
Verified Solution
Link Copied!
Question
Accounting
A partner's tax capital account balance and book capital account balance may be different because: Book capital accounts usually include the adjusted basis of a contributed asset, whereas the tax capital account includes the FMV of the asset, less any assumed liabilities. Book capital accounts are decreased for the amount of tax-exempt interest income and Section 179 deductions, whereas tax capital accounts are increased for these items. Book capital accounts usually include the FMV of a contributed asset, whereas the tax capital account calculation starts with the adjusted basis of the contributed property. Book capital accounts include adjustments when depreciation methods vary from MACRS/ACRS rules, and tax capital accounts are not required to use MACR/ACRS. Mark for follow up
Answer & Explanation
Solved by verified expert
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
