Lonnie Davis has been a general partner in the Highland Partnership for many years and is also a sole proprietor in a separate business. To spend more time focusing on his sole proprietorship, he plans to leave Highland and will receive a liquidating distribution of $50, 500 in cash and land with a fair market value of $115,500 (tax basis of $145, 250). Immediately before the distribution, Lonnie's basis in his partnership interest is $412,000, which includes his $57,000 share of partnership debt. Highland Partnership does not hold any hot assets. a. What are the amount and character of any gain or loss to Lonnie?

Lonnie Davis has been a general partner in the Highland Partnership for many years and is also a sole proprietor in a separate business. To spend more time focusing on his sole proprietorship, he plans to leave Highland and will receive a liquidating distribution of $50, 500 in cash and land with a fair market value of $115,500 (tax basis of $145, 250). Immediately before the distribution, Lonnie's basis in his partnership interest is $412,000, which includes his $57,000 share of partnership debt. Highland Partnership does not hold any hot assets. a. What are the amount and character of any gain or loss to Lonnie?

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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