Consider the balance sheet for the XYZ Partnership. Assets Liability & Capital Tax FMV Tax FMV Cash
Question:
- Consider the balance sheet for the XYZ Partnership.
Assets Liability & Capital
Tax FMV Tax FMV
Cash $ 30 $ 30 Liabilities $ 0 $ 0
Accts. Rec. 0 60
Land 30 60 Capital
$ 60 $150 Tax FMV
Capital, X $ 20 $ 50
Capital, Y 20 50
Capital, Z 20 50
$ 60 $150
X sells her interest in the partnership to B for $50 cash.
A. What is the amount and character of the gain or loss realized by X on sale of her partnership interest to B?
B. What is B’s initial outside basis in his partnership interest? In the absence of a § 754 election, how much income will B report if the partnership collects the accounts receivable? If a § 754 election is made, along with a § 743(b) adjustment, how much income will B report if the partnership collects the receivables. Also, how much is the §743(b) adjustment and how is it allocated among the assets?
Accounting Business Reporting For Decision Making
ISBN: 9780730302414
4th Edition
Authors: Jacqueline Birt, Keryn Chalmers, Albie Brooks, Suzanne Byrne, Judy Oliver