AJ is a 30% partner in the Trane partnership, a calendar year end entity. On January 1, AJ has an outside basis in his interest in Trane of S73,000, which includes his share of the $50,000 of partnership liabilities. Trane generates $42,000 of income during the year and does not make any changes to its liabilities. On December 31, Trane makes a proportionate distribution of the following assets to AJ to terminate his partnership interest: Tax Basis FMV Inventory $ 56,000 S 65,000 Land 30,000 25,000 Totals S 86,000 $90,000 What is the amount of any recognized gain or loss to AJ? Same facts as the prior question, what is AJ's basis in the land?

AJ is a 30% partner in the Trane partnership, a calendar year end entity. On January 1, AJ has an outside basis in his interest in Trane of S73,000, which includes his share of the $50,000 of partnership liabilities. Trane generates $42,000 of income during the year and does not make any changes to its liabilities. On December 31, Trane makes a proportionate distribution of the following assets to AJ to terminate his partnership interest: Tax Basis FMV Inventory $ 56,000 S 65,000 Land 30,000 25,000 Totals S 86,000 $90,000 What is the amount of any recognized gain or loss to AJ? Same facts as the prior question, what is AJ's basis in the land?

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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