partnership taxation

Anonymous
timer Asked: Dec 18th, 2018
account_balance_wallet $25

Question description

Good Times is a general partnership with the following balance sheets:

Basis

FMV

Cash

$15,000

$15,000

Capital assets

35,000

75,000

Land

85,000

240,000

Totals

$135,000

$330,000

Recourse liabilities

$90,000

$90,000

Capital, Claire

15,000

80,000

Capital, Lorie

15,000

80,000

Capital, Tom

15,000

80,000

Totals

$135,000

$330,000

The partners share equally in profits, losses and capital. Tom is negotiating to sell his interest in the partnership to an unrelated buyer. Assume the buyer is willing to pay $120,000 cash for half Tom’s interest.

  1. What will be the amount realized by Tom on the sale?
  2. What is the tax basis of the interest to be sold by Tom?
  3. How much gain will Tom recognize on the sale?
  4. What will be the buyer’s tax basis in the newly acquired interest?

Tutor Answer

Professorjuliette
School: Boston College

check_circle Professorjuliette marked this question as complete.

Running Head: Partnership Taxation

1

Partnership Taxation

Name of Student
Institutional affiliation
Date

2

Partnership Taxation

Basis

FMV

Cash

$...

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Anonymous
10/10 would recommend. Responsive and helpful.

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