Reds, LLC is an equal partnership. The partnership has the following balance sheet and asset fair market values. All partnership debt is allocated proportionately among the partners according to percentage interest. FMV Book Tax Book Tax Cash 240 240 240 Debt 300 300 A/R 60 0 0 Inventory 120 60 60 Johnny 240 240 Riverfront (land) 240 360 360 Eric 240 240 Queen City part (land) 240 180 180 Pete 240 240 Stock 300 180 180 What are the tax consequences to Johnny if he receives the accounts receivable and Riverfront in complete liquidation of his partnership interest? Does he recognize gain or loss? What basis does he take in the accounts receivable and Riverfront? Alternatively, what are the tax consequences to Johnny if he receives one-half of the inventory (FMV 60, basis 30) and Riverfront in complete liquidation of his partnership interest? Does he recognize gain or loss? What basis does he take in the inventory and Riverfront?
Reds, LLC is an equal partnership. The partnership has the following balance sheet and asset fair market values. All partnership debt is allocated proportionately among the partners according to percentage interest. FMV Book Tax Book Tax Cash 240 240 240 Debt 300 300 A/R 60 0 0 Inventory 120 60 60 Johnny 240 240 Riverfront (land) 240 360 360 Eric 240 240 Queen City part (land) 240 180 180 Pete 240 240 Stock 300 180 180 What are the tax consequences to Johnny if he receives the accounts receivable and Riverfront in complete liquidation of his partnership interest? Does he recognize gain or loss? What basis does he take in the accounts receivable and Riverfront? Alternatively, what are the tax consequences to Johnny if he receives one-half of the inventory (FMV 60, basis 30) and Riverfront in complete liquidation of his partnership interest? Does he recognize gain or loss? What basis does he take in the inventory and Riverfront?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Related questions
Question
- Reds, LLC is an equal partnership. The partnership has the following balance sheet and asset fair market values. All partnership debt is allocated proportionately among the partners according to percentage interest.
|
|
FMV |
Book |
Tax |
|
Book |
Tax |
|
Cash |
240 |
240 |
240 |
Debt |
300 |
300 |
|
A/R |
60 |
0 |
0 |
|
|
|
|
Inventory |
120 |
60 |
60 |
Johnny |
240 |
240 |
|
Riverfront (land) |
240 |
360 |
360 |
Eric |
240 |
240 |
|
Queen City part (land) |
240 |
180 |
180 |
Pete |
240 |
240 |
|
Stock |
300 |
180 |
180 |
|
|
|
- What are the tax consequences to Johnny if he receives the accounts receivable and Riverfront in complete liquidation of his partnership interest? Does he recognize gain or loss? What basis does he take in the accounts receivable and Riverfront?
- Alternatively, what are the tax consequences to Johnny if he receives one-half of the inventory (FMV 60, basis 30) and Riverfront in complete liquidation of his partnership interest? Does he recognize gain or loss? What basis does he take in the inventory and Riverfront?
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