Given the data below. 5. A and B are individuals. The AB partnership has the following balance

Given the data below.

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5. A and B are individuals. The AB partnership has the following balance sheet: Assets Partner's Capital Cash A.B. $4,000 F.M.V. A.B. FM.V. $4,000 A $4,000 $6,000 Inventory 0 $4,000 B $4,000 $6,000 Land (Cap. Asset) $4,000 $4,000 $8,000 $12,000 $8,000 $12,000 The partnership distributes all the cash to A, who thereafter owns a one-fourth interest in the partnership. If A is in the 15% tax bracket and B is in a much higher marginal bracket, how would you structure the transaction? See Reg. Sec. 1.751- 5. A and B are individuals. The AB partnership has the following balance sheet: Assets Partner's Capital Cash A.B. $4,000 F.M.V. A.B. FM.V. $4,000 A $4,000 $6,000 Inventory 0 $4,000 B $4,000 $6,000 Land (Cap. Asset) $4,000 $4,000 $8,000 $12,000 $8,000 $12,000 The partnership distributes all the cash to A, who thereafter owns a one-fourth interest in the partnership. If A is in the 15% tax bracket and B is in a much higher marginal bracket, how would you structure the transaction? See Reg. Sec. 1.751-

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Heres how to structure the transaction to minimize taxes for the partnership and benefit from As low... View the full answer