Partnership (a calendar-year-end entity) has the following assets as of December 31 of the current year: Tax Basis FMV Cash $ 47,400 $ 47,400 Accounts receivable 15,800 31,600 Inventory 84,000 124,200 Totals $ 147,200 $ 203,200 On December 31, Taurin distributes $15,800 of cash, $10,533 (FMV) of accounts receivable, and $41,400 (FMV) of inventory to Emma (a one-third partner) in termination of her partnership interest. Emma's basis in her partnership interest immediately prior to the distribution is $41,767. Required: c1. If Emma's basis before the distribution was $57,517 rather than $41,767, what is Emma's recognized gain or loss? c2. What is her basis in the distributed assets ?
Partnership (a calendar-year-end entity) has the following assets as of December 31 of the current year: Tax Basis FMV Cash $ 47,400 $ 47,400 Accounts receivable 15,800 31,600 Inventory 84,000 124,200 Totals $ 147,200 $ 203,200 On December 31, Taurin distributes $15,800 of cash, $10,533 (FMV) of accounts receivable, and $41,400 (FMV) of inventory to Emma (a one-third partner) in termination of her partnership interest. Emma's basis in her partnership interest immediately prior to the distribution is $41,767. Required: c1. If Emma's basis before the distribution was $57,517 rather than $41,767, what is Emma's recognized gain or loss? c2. What is her basis in the distributed assets ?
Chapter28: Income Taxati On Of Trusts And Estates
Section: Chapter Questions
Problem 19P
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The Taurin
| Tax Basis | FMV | |
|---|---|---|
| Cash | $ 47,400 | $ 47,400 |
| Accounts receivable | 15,800 | 31,600 |
| Inventory | 84,000 | 124,200 |
| Totals | $ 147,200 | $ 203,200 |
On December 31, Taurin distributes $15,800 of cash, $10,533 (FMV) of accounts receivable, and $41,400 (FMV) of inventory to Emma (a one-third partner) in termination of her partnership interest. Emma's basis in her partnership interest immediately prior to the distribution is $41,767.
Required:
c1. If Emma's basis before the distribution was $57,517 rather than $41,767, what is Emma's recognized gain or loss?
c2. What is her basis in the distributed assets ?
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