ACT 550 CSU Accounting Memorandum

Description

Review the Portfolio Project options due in Week 8. Choose the portfolio project that you will complete for this course. In a one-page memo to the client (either Venezia Partnership or Samantha Youst, depending on the option chosen) summarize the significant tax issues faced during the current year. Then discuss at least three sources that you will use to address the tax issues. Provide a citation for the source, a brief summary of the source, and how you think it will be helpful for addressing the tax issues for your client.

Information Needed to complete above:

In the current year, Mary, Andrew, and Paul formed Venezia General Partnership. Mary contributed $55,000 cash, Andrew contributed $55,000, and Paul contributed land with a cash basis of $70,000 and a fair market value of $180,000. The partnership assumed a $70,000 mortgage on the land; no partner is personally liable for the mortgage. At the end of the current year, Venezia made a $7,000 payment on the mortgage. Mary, Andrew, and Paul will split all profits and losses equally.

Current-year operations had the following results:

Sales revenue: $260,000
Cost of goods sold: $205,000
Operating expenses: $35,000
Long-term capital gains: $1,200
Section 1231 Gains: $450
Charitable contributions: $350
Municipal bond interest: $150
Salary paid as a guaranteed payment to Andrew (not included in expense): $1,500

Explanation & Answer:

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