Assume that the partnership of Jet and Jane have the balance sheet illustrated below. Book Tax Assets
Question:
Assume that the partnership of Jet and Jane have the balance sheet illustrated below.
Book | Tax | |||
Assets | 240000 | 240000 | ||
Nonrecourse Debt | 300000 | |||
Debt | Outside | |||
Capital Accounts | Book | Tax | Share | Basis |
Jet | -40000 | -40000 | 150000 | 110000 |
Jane | -20000 | -20000 | 150000 | 130000 |
Assume the partnership sells the assets for $320,000. The bu
Assume that the partnership of Jet and Jane have the balance sheet illustrated below.
Book | Tax | |||
Assets | 240000 | 240000 | ||
Nonrecourse Debt | 300000 | |||
Debt | Outside | |||
Capital Accounts | Book | Tax | Share | Basis |
Jet | -40000 | -40000 | 150000 | 110000 |
Jane | -20000 | -20000 | 150000 | 130000 |
Assume the partnership sells the assets for $320,000. The buyer assumes the partnership debt and pays the partnership $20,000 in cash. The general partnership profits sharing ratio is 50% to each partner. What is the TOTAL tax gain on this sale?
How much of the tax gain on sale will be allocated to Jet?
How much of the tax gain on sale will be allocated to Jane?
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill