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?
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?
Chapter5: Gross Income: Exclusions
Section: Chapter Questions
Problem 32P
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Question
- 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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