Answer the following questions regarding four liquidating distribution scenarios, the partnership also liquidates.If there is no gain or loss or if an amount is zero, enter "0".For each, determine the amount and character of any gain or loss to be recognized by each partner and the basis of each asset (other than cash) received.Assume for all scenarios that the distributions of hot assets are proportionate to the partners (or there are no hot assets). You can use the format in Concept Summary 11.3. (3) Neil has a partnership basis of $285,000. He receives $114,000 of cash, inventory with a basis to the partnership of $85,500, anda capital asset with a partnership basis of $57,000. The inventory and capital asset have fair market values of $57,000 and $85,500,respectively.He will recognizeof $The capital asset is allocated a basis of $and theinventory will have a basis of $(4) Oscar has a partnership basis of $114,000. He receives a distribution of $28,500 of cash and an account receivable with a basis of$0 to the partnership (value is $43,320).He will recognize aof $

Partnership refers to an agreement made between 2 or more individuals or organizations to work…

Answered: (3) Neil has a partnership basis of…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Answer the following questions regarding four liquidating distribution scenarios, the partnership also liquidates.

If there is no gain or loss or if an amount is zero, enter "0".

For each, determine the amount and character of any gain or loss to be recognized by each partner and the basis of each asset (other than cash) received.

Assume for all scenarios that the distributions of hot assets are proportionate to the partners (or there are no hot assets). You can use the format in Concept Summary 11.3.

(3) Neil has a partnership basis of $285,000. He receives $114,000 of cash, inventory with a basis to the partnership of $85,500, and
a capital asset with a partnership basis of $57,000. The inventory and capital asset have fair market values of $57,000 and $85,500,
respectively.
He will recognize
of $
The capital asset is allocated a basis of $
and the
inventory will have a basis of $
(4) Oscar has a partnership basis of $114,000. He receives a distribution of $28,500 of cash and an account receivable with a basis of
$0 to the partnership (value is $43,320).
He will recognize a
of $

Definition Definition Arrangement between two or more people whereby they agree to manage business operations and share its profits and losses in an agreed ratio. The agreement drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, and drawings of a partner.

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