Question

Gail and Harry own the GH Partnership. They have conducted the business as a partnership for 10 years. The bases for their partnership interests are as follows.
Gail Harry
$100,000 ....... $150,000
GH Partnership holds the following assets.
*The straight-line method has been used to depreciate the building. Accumulated depreciation is $70,000.
Gail and Harry sell their partnership interests to Keith and Liz for $307,000 each.
a. Determine the tax consequences of the sale to Gail, Harry, and GH Partnership.
b. From a tax perspective, should it matter to Keith and Liz whether they purchase Gail and Harry's partnership interests or the partnership assets from GH Partnership? Explain.


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  • CreatedMay 25, 2015
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