Leslie and Jake are partners in the LJ partnership, which sells golf equipment. Leslie contributed $50,000 cash and Blackacre (FMV $50,000; basis $25,000).  Jake contributed $100,000 cash.  The LJ partnership subsequently purchased Whiteacre for $100,000 and two inventory items (golf balls and golf clubs).   One year after formation, Leslie sells her partnership interest to Tony for $120,000.  Leslie’s basis in her partnership interest (and tax capital account) is $75,000 at the time of the sale and she recognizes $45,000 of gain on the sale.     Assets   FMV     Book Tax Debt Book Tax Golf Balls 2,500 10,000 10,000       Golf Clubs 45,000 40,000 40,000       Blackacre 75,000 50,000 25,000 Capital     Whiteacre 117,500 100,000 100,000 Leslie 100,000 75,000         Jake 100,000 100,000   Assume the same facts as above. The partnership subsequently sells Blackacre for $100,000 and Whiteacre for $140,000.  What amount of gain from the sale of these assets will Tony report on his 1040?

SWFT Comprehensive Vol 2020
43rd Edition
ISBN:9780357391723
Author:Maloney
Publisher:Maloney
Chapter5: Gross Income: Exclusions
Section: Chapter Questions
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  1. Leslie and Jake are partners in the LJ partnership, which sells golf equipment. Leslie contributed $50,000 cash and Blackacre (FMV $50,000; basis $25,000).  Jake contributed $100,000 cash.  The LJ partnership subsequently purchased Whiteacre for $100,000 and two inventory items (golf balls and golf clubs).   One year after formation, Leslie sells her partnership interest to Tony for $120,000.  Leslie’s basis in her partnership interest (and tax capital account) is $75,000 at the time of the sale and she recognizes $45,000 of gain on the sale.  

 

Assets  

FMV    

Book

Tax

Debt

Book

Tax

Golf Balls

2,500

10,000

10,000

 

 

 

Golf Clubs

45,000

40,000

40,000

 

 

 

Blackacre

75,000

50,000

25,000

Capital

 

 

Whiteacre

117,500

100,000

100,000

Leslie

100,000

75,000

 

 

 

 

Jake

100,000

100,000

 

Assume the same facts as above. The partnership subsequently sells Blackacre for $100,000 and Whiteacre for $140,000.  What amount of gain from the sale of these assets will Tony report on his 1040?

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