6.10 The balance sheet of the XYZ Partnership (expanded to show asset values) is as follows:...

  

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6.10 The balance sheet of the XYZ Partnership (expanded to show asset values) is as follows: Cash Inventory Capital Asset 1 Capital Asset 2 Capital Asset 3 Capital Asset 4 Assets Tax $ 15,000 60,000 0 Book FMV $15,000 $ 15,000 [None] 60,000 20,000 60,000 170,000 X 150,000 Y 185,000 Z 0 210,000 210,000 170,000 170,000 130,000 130,000 Liabilities Total Liabilities $ Tax Capital Book 0 $ 0 195,000 195,000 195,000 195,000 195,000 195,000 Total Assets $585,000 $585,000 $600,000 and Capital $585,000 $585,000 The partnership distributes its $15,000 in cash and Capital Asset 4 to Y in liquidation of her interest. If the partnership has made an election under section 754, what is its basis in Capital Asset 2 following this transaction? 6.10 The balance sheet of the XYZ Partnership (expanded to show asset values) is as follows: Cash Inventory Capital Asset 1 Capital Asset 2 Capital Asset 3 Capital Asset 4 Assets Tax $ 15,000 60,000 0 Book FMV $15,000 $ 15,000 [None] 60,000 20,000 60,000 170,000 X 150,000 Y 185,000 Z 0 210,000 210,000 170,000 170,000 130,000 130,000 Liabilities Total Liabilities $ Tax Capital Book 0 $ 0 195,000 195,000 195,000 195,000 195,000 195,000 Total Assets $585,000 $585,000 $600,000 and Capital $585,000 $585,000 The partnership distributes its $15,000 in cash and Capital Asset 4 to Y in liquidation of her interest. If the partnership has made an election under section 754, what is its basis in Capital Asset 2 following this transaction?

Answer rating: 100% (QA)

SOLUTION To determine the basis in Capital Asset 2 following the transaction we need to calculate the adjusted basis of the partnerships assets after ... View the full answer