MKE, LLC is an equal partnership. The partnership has the tax balance sheet and asset fair market values listed in the table below. All partnership debt is allocated proportionately among the partners. In a liquidating distribution, Mackayla receives: $1,200 cash, ½ the inventory (FMV 600, basis 300), and Whiteacre. Does Mackayla recognize any gain or loss? What basis does she take in the inventory and Whiteacre?Alternatively, assume Mackayla receives: $600 cash, the accounts receivable, and Greenacre in a liquidating distribution. Does Mackayla recognize any gain or loss? What basis does she take in the A/R and Greenacre? FMVBookTax BookTaxCash6,0006,0006,000Debt3,0003,000A/R60000 Inventory1,200600600Capital Blackacre2,4003,0003,000Mackayla3.2003,200Whiteacre2,4001,2001,200Kelly3,2003,200Greenacre3,0001,8001,800Emily3,2003,200

1. Mackayla Receives:$1,200 cash,½ the inventory (FMV $600, basis $300),Whiteacre (FMV $2,400, basis…

Answered: MKE, LLC is an equal partnership. The…

SWFT Essntl Tax Individ/Bus Entities 2020

23rd Edition

ISBN:9780357391266

Author:Nellen

Publisher:Nellen

Chapter14: Partnerships And Limited Liability Entities

Section: Chapter Questions

Problem 22P

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MKE, LLC is an equal partnership. The partnership has the tax balance sheet and asset fair market values listed in the table below. All partnership debt is allocated proportionately among the partners.

In a liquidating distribution, Mackayla receives: $1,200 cash, ½ the inventory (FMV 600, basis 300), and Whiteacre. Does Mackayla recognize any gain or loss? What basis does she take in the inventory and Whiteacre?
Alternatively, assume Mackayla receives: $600 cash, the accounts receivable, and Greenacre in a liquidating distribution. Does Mackayla recognize any gain or loss? What basis does she take in the A/R and Greenacre?

	FMV	Book	Tax		Book	Tax
Cash	6,000	6,000	6,000	Debt	3,000	3,000
A/R	600	0	0
Inventory	1,200	600	600	Capital
Blackacre	2,400	3,000	3,000	Mackayla	3.200	3,200
Whiteacre	2,400	1,200	1,200	Kelly	3,200	3,200
Greenacre	3,000	1,800	1,800	Emily	3,200	3,200

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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