At the end of last year, June, a 30% partner in the four-person BJJM Partnership, had an outside basis of $75,000 in the partnership, including a $60,000 share of partnership debt. June’s share of the partnership’s § 1245 recapture potential was $40,000. All parties use the calendar year. Describe the income tax consequences to June in each of the following

At the end of last year, June, a 30% partner in the four-person BJJM Partnership, had an outside basis of $75,000 in the partnership, including a $60,000 share of partnership debt. June’s share of the partnership’s § 1245 recapture potential was $40,000. All parties use the calendar year. Describe the income tax consequences to June in each of the following independent situations that take place in the current year.

a. On the first day of the tax year, June sells her partnership interest to Marilyn for $120,000 cash and the assumption by Marilyn of the appropriate share of partnership liabilities.

b. June dies after a lengthy illness on April 1 of the current year. June’s brother immediately takes June’s place in the partnership.

Partnership
A legal form of business operation between two or more individuals who share management and profits. A Written agreement between two or more individuals who join as partners to form and carry on a for-profit business. Among other things, it states...

This problem has been solved!


Do you need an answer to a question different from the above? Ask your question!
Related Book For answer-question

South Western Federal Taxation 2016 Corporations Partnerships Estates And Trusts

39th Edition

Authors: James Boyd, William Hoffman, Raabe, David Maloney, Young

ISBN: 9781305399884