The equal XYZ Partnership has the following balance sheet:

XYZ has a Code Section 754 election in effect, and X sells her interest to W for $8,000 cash. The two Properties are both capital assets. 

a. Calculate the amount of the basis adjustment under 743(b), 

b. calculate the amount of this adjustment that is allocated to each asset.

 

Transcribed Image Text:

BASIS FMV PARTNERS' BASIS FMV CAPITAL Property A $ 4,000 $ 8,000 Property B $ 8,000 $ 16,000 $ 4,000 $ 8,000 $ 4,000 $ 8,000 $ 4,000 $ 8,000 Y $ 12,000 $ 24,000 $ 12,000 $ 24,000 BASIS FMV PARTNERS' BASIS FMV CAPITAL Property A $ 4,000 $ 8,000 Property B $ 8,000 $ 16,000 $ 4,000 $ 8,000 $ 4,000 $ 8,000 $ 4,000 $ 8,000 Y $ 12,000 $ 24,000 $ 12,000 $ 24,000

Answer rating: 100% (QA)

X is selling his interest in the company to W for 8000 in cash a The difference bet... View the full answer