During the current year, Phyllis Diaz sold her 20% interest in Carson Partnership for $46,000. She held
Question:
During the current year, Phyllis Diaz sold her 20% interest in Carson Partnership for $46,000. She held the interest for several years. She has come to us seeking the character of the gain or loss.
This is all of the information provided to us.
show Tax Workpaper that shows the calculation of Phyllis' gain or loss realized. Be sure to answer the question, "What will be the character of the gain or loss?"
During the current year, Phyllis Diaz sold her 20% interest in Carson Partnership for $46,000.
She held the interest for several years.
Prior to the sale, the partnership had the following on their books:
Adj. Basis Fair Market Value
Cash $ 70,000 $ 70,000
Accounts Receivable 0 $ 30,000
Machinery* $ 30,000 $ 50,000
Real Estate $ 120,000 $ 100,000
*The partnership would recognize $6,000 of Sec.1245 gain on this asset if it was sold.
Liabilities $ 20,000 $ 20,000
Capital-Phyllis $ 60,000 $ 46,000
Capital-Michael $ 140,000 $ 184,000
show calculations for each part in Excel
Federal Taxation 2016 Comprehensive
ISBN: 9780134104379
29th Edition
Authors: Thomas R. Pope, Timothy J. Rupert, Kenneth E. Anderson