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g-1. If Reed sells his interest in Slicenhook to Indie Ruff, what are the amount and character of his recognized gain or loss? g-2. What is Indie's basis in the partnership interest? Complete this question by entering your answers in the tabs below. Req G1 If Reed sells his interest in Slicenhook to Indie Ruff, what are the amount and character of his recognized gain or loss? O$102,100 ordinary income and $89,000 capital gains O$102,400 ordinary income and $90,000 capital loss O$162,400 capital loss and $89,000 ordinary income $89,000 ordinary income and $102,400 capital gains Neither gain nor loss recognized Req G2

g-1. If Reed sells his interest in Slicenhook to Indie Ruff, what are the amount and character of his recognized gain or loss? g-2. What is Indie's basis in the partnership interest? Complete this question by entering your answers in the tabs below. Req G1 If Reed sells his interest in Slicenhook to Indie Ruff, what are the amount and character of his recognized gain or loss? O$102,100 ordinary income and $89,000 capital gains O$102,400 ordinary income and $90,000 capital loss O$162,400 capital loss and $89,000 ordinary income $89,000 ordinary income and $102,400 capital gains Neither gain nor loss recognized Req G2

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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The operating expenses include a $1,800 trucking fine that one of its drivers incurred for reckless driving and speeding and meals expense of $6,000 (the meals were not provided by a restaurant). By the end of 2022, Reed has had a falling out with Carrie and Doug and has decided to leave the partnership. He has located a potential buyer for his partnership interest, Indie Ruff. Indie has agreed to purchase Reed's interest in Slicenhook for $730,000 in cash and the assumption of Reed's share of Slicenhook's debt. Carrie and Doug, however, are not certain that admitting Indie to the partnership is such a good idea. They want to consider having Slicenhook liquidate Reed's interest on January 1, 2023. As of January 1, 2023, Slicenhook has the following assets: Cash Investment-tax exempts Investment stock Equipment-net of depreciation Building-net of depreciation Land Total Carrie and Doug propose that Slicenhook distribute the following to Reed in complete liquidation of his partnership interest: Cash Investment stock. Equipment-$200,000 cost, net of depreciation Req G1 Total depreciation Total Tax Basis $ 876,800 15,000 45,000 333,000 1,146,000 460,000 $ 2,875,800 FMV $ 876,800 18,000 45,000 600,000 1,440,000 510,000 $ 3,489,800 Tax Basis $ 485,000 45,000 111,000 $ 641,000 Req G2 111,000 $ 641,000 Slicenhook has not purchased or sold any equipment since its original purchase just after formation. Complete this question by entering your answers in the tabs below. FMV $ 485,000 45,000 200,000 $ 730,000 g-1. If Reed sells his interest in Slicenhook to Indie Ruff, what are the amount and character of his recognized gain or loss? g-2. What is Indie's basis in the partnership interest? 200,000 $ 730,000 If Reed sells his interest in Slicenhook to Indie Ruff, what are the amount and character of his recognized gain or loss? O$102,100 ordinary income and $89,000 capital gains O$102,400 ordinary income and $90,000 capital loss O$162,400 capital loss and $89,000 ordinary income $89,000 ordinary income and $102,400 capital gains ONeither gain nor loss recognized S
Transcribed Image Text:The operating expenses include a $1,800 trucking fine that one of its drivers incurred for reckless driving and speeding and meals expense of $6,000 (the meals were not provided by a restaurant). By the end of 2022, Reed has had a falling out with Carrie and Doug and has decided to leave the partnership. He has located a potential buyer for his partnership interest, Indie Ruff. Indie has agreed to purchase Reed's interest in Slicenhook for $730,000 in cash and the assumption of Reed's share of Slicenhook's debt. Carrie and Doug, however, are not certain that admitting Indie to the partnership is such a good idea. They want to consider having Slicenhook liquidate Reed's interest on January 1, 2023. As of January 1, 2023, Slicenhook has the following assets: Cash Investment-tax exempts Investment stock Equipment-net of depreciation Building-net of depreciation Land Total Carrie and Doug propose that Slicenhook distribute the following to Reed in complete liquidation of his partnership interest: Cash Investment stock. Equipment-$200,000 cost, net of depreciation Req G1 Total depreciation Total Tax Basis $ 876,800 15,000 45,000 333,000 1,146,000 460,000 $ 2,875,800 FMV $ 876,800 18,000 45,000 600,000 1,440,000 510,000 $ 3,489,800 Tax Basis $ 485,000 45,000 111,000 $ 641,000 Req G2 111,000 $ 641,000 Slicenhook has not purchased or sold any equipment since its original purchase just after formation. Complete this question by entering your answers in the tabs below. FMV $ 485,000 45,000 200,000 $ 730,000 g-1. If Reed sells his interest in Slicenhook to Indie Ruff, what are the amount and character of his recognized gain or loss? g-2. What is Indie's basis in the partnership interest? 200,000 $ 730,000 If Reed sells his interest in Slicenhook to Indie Ruff, what are the amount and character of his recognized gain or loss? O$102,100 ordinary income and $89,000 capital gains O$102,400 ordinary income and $90,000 capital loss O$162,400 capital loss and $89,000 ordinary income $89,000 ordinary income and $102,400 capital gains ONeither gain nor loss recognized S
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