Mikaeres basis in the Jimsoo Partnership is $53,000. In a proportionate liquidating distribution, Mikaere receives cash of
Question:
Mikaere’s basis in the Jimsoo Partnership is $53,000. In a proportionate liquidating distribution, Mikaere receives cash of $7,000 and two capital assets: (1) Land A with a fair market value of $20,000 and a basis to Jimsoo of $16,000 and (2) Land B with a fair market value of $10,000 and a basis to Jimsoo of $16,000. Jimsoo has no liabilities.
a) How much gain or loss will Mikaere recognize on the distribution? What is the character of any recognized gain or loss?
b) What is Mikaere’s basis in the distributed assets?
c) If the two parcels of land had been inventory to Jimsoo, what are the tax consequences to Mikaere (amount and character of gain or loss and basis in distributed assets)?
Step by Step Answer:
Taxation Of Individuals And Business Entities 2023 Edition
ISBN: 9781265790295
14th Edition
Authors: Brian Spilker, Benjamin Ayers, John Barrick, Troy Lewis, John Robinson, Connie Weaver, Ronald Worsham