Partnership (a calendar-year-end entity) has the following assets as of December 31 of the current year: Tax Basis FMV Cash $ 47,400 $ 47,400 Accounts receivable 15,800 31,600 Inventory 84,000 124,200 Totals $ 147,200 $ 203,200 On December 31, Taurin distributes $15,800 of cash, $10,533 (FMV) of accounts receivable, and $41,400 (FMV) of inventory to Emma (a one-third partner) in termination of her partnership interest. Emma's basis in her partnership interest immediately prior to the distribution is $41,767. Required: c1. If Emma's basis before the distribution was $57,517 rather than $41,767, what is Emma's recognized gain or loss? c2. What is her basis in the distributed assets ?
Partnership (a calendar-year-end entity) has the following assets as of December 31 of the current year: Tax Basis FMV Cash $ 47,400 $ 47,400 Accounts receivable 15,800 31,600 Inventory 84,000 124,200 Totals $ 147,200 $ 203,200 On December 31, Taurin distributes $15,800 of cash, $10,533 (FMV) of accounts receivable, and $41,400 (FMV) of inventory to Emma (a one-third partner) in termination of her partnership interest. Emma's basis in her partnership interest immediately prior to the distribution is $41,767. Required: c1. If Emma's basis before the distribution was $57,517 rather than $41,767, what is Emma's recognized gain or loss? c2. What is her basis in the distributed assets ?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
The Taurin
| Tax Basis | FMV | |
|---|---|---|
| Cash | $ 47,400 | $ 47,400 |
| 15,800 | 31,600 | |
| Inventory | 84,000 | 124,200 |
| Totals | $ 147,200 | $ 203,200 |
On December 31, Taurin distributes $15,800 of cash, $10,533 (FMV) of accounts receivable, and $41,400 (FMV) of inventory to Emma (a one-third partner) in termination of her partnership interest. Emma's basis in her partnership interest immediately prior to the distribution is $41,767.
Required:
c1. If Emma's basis before the distribution was $57,517 rather than $41,767, what is Emma's recognized gain or loss?
c2. What is her basis in the distributed assets ?
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education