B. 1. A is a one-third partner in partnership ABC. A sells his one-third interest in ABC year partnership. ABC does not have a section 754 election in effect. The balance to D on January 1 of the current year for $200,000. ABC is a cash-method, calendar- sheet of ABC is as follows: Basis 1019 FMV Assets $10,000 $10,000 Cash 0 Account Receivable $30,000 $40,000 Inventory $150,000 $200,000 Furniture, fixture and equipment $210,000 $400,000 Goodwill $400,000 $700,000 20 CSAC $100,000 $100,000 Liabilities $100,000 $200,000 Capital - A $100,000 $200,000 Capital B our with under LR $100,000 $200,000 Capital-C JYOT hledel $400,000 $700,000 Heer $150,000 of depreciation was taken on the furniture, fixtures, and equipment, an thus the original basis was $300,000. Assume for the sake of the problem that th outside basis of the partners in their partnership interests (without taking into co sideration their allocable share of debt under I.R.C. $ 752) is equal to their capital shown on the balance sheet. a. What is A's amount realized? b. How much gain is recognized by A? c. What is the character of A's gain? 08.8.01-ter per-es lux s 15 core d. What is D's basis for her partnershin interest? $50,000

B. 1. A is a one-third partner in partnership ABC. A sells his one-third interest in ABC year partnership. ABC does not have a section 754 election in effect. The balance to D on January 1 of the current year for $200,000. ABC is a cash-method, calendar- sheet of ABC is as follows: Basis 1019 FMV Assets $10,000 $10,000 Cash 0 Account Receivable $30,000 $40,000 Inventory $150,000 $200,000 Furniture, fixture and equipment $210,000 $400,000 Goodwill $400,000 $700,000 20 CSAC $100,000 $100,000 Liabilities $100,000 $200,000 Capital - A $100,000 $200,000 Capital B our with under LR $100,000 $200,000 Capital-C JYOT hledel $400,000 $700,000 Heer $150,000 of depreciation was taken on the furniture, fixtures, and equipment, an thus the original basis was $300,000. Assume for the sake of the problem that th outside basis of the partners in their partnership interests (without taking into co sideration their allocable share of debt under I.R.C. $ 752) is equal to their capital shown on the balance sheet. a. What is A's amount realized? b. How much gain is recognized by A? c. What is the character of A's gain? 08.8.01-ter per-es lux s 15 core d. What is D's basis for her partnershin interest? $50,000

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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