Assume in Problem 47 that Barry’s partnership interest is not sold to another partner. Instead, the partnership makes a liquidating distribution of $90,000 cash to Barry, and the remaining partners assume his share of the liabilities. How much gain or loss must Barry recognize? How is it characterized? Assume that Barry is a general partner, there is no provision for the payment for goodwill in the partnership agreement, and capital is not a material income-producing factor to the partnership.
Answer to relevant QuestionsDiana, a partner in the cash basis HDA Partnership, has a one-third interest in partnership profits and losses. The partnership’s balance sheet at the end of the current year is as follows: Diana sells her interest in the ...Who makes the optional adjustment-to-basis election? How is the election made? What is its effect on future years? Scott Tyrney owns 21% of an S corporation. He is confused with respect to the amounts of the corporate AAA and his stock basis. Write a brief memo to Scott identifying the key differences between AAA and an S shareholder’s ...Greiner, Inc., a calendar year S corporation, holds no AEP. During the year, Chad, an individual Greiner shareholder, receives a cash distribution of $30,000 from the entity. Chad’s basis in his stock is $25,000. Compute ...Assume the same facts as in Problem 36, except that the two shareholders consent to an AAA bypass election.
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