The ABCD Partnership owns the following assets on December 30 of the current year View the assets. View the additional information. Requirement What are the tax consequences of the distribution to the partnership, Alana, and the other partners? Start by completing a Sec. 751 nonliquidating distribution analysis. (If an input field is not used in the table or the balance is 0, leave the field empty; do not enter a zero. Round to the nearest dollar. Use a minus sign or parentheses in the Difference column if Alana gave up her interest in a particular property.) - X Sec. 751 assets: Total Sec. 751 assets Non-Sec. 751 assets: Total non-Sec. 751 assets Beginning Partnership Amount Alana's Interest Before Distribution (1/4) Alana's Interest After Hypothetical Distribution (1/5) Proportionate Actual Distribution Distribution Difference Assets Assets Cash Receivables Inventory Total Partnership's Basis $ Additional Information 100,000 $ 0 77,000 177,000 $ FMV 100,000 36,000 110,000 246,000 The partnership has no liabilities, and each partner's basis in his or her partnership interest is $30,000. On December 30 of the current year, Alana receives a current distribution of inventory having a $15,375 FMV, which reduces her partnership interest from one-fourth to one-fifth X
The ABCD Partnership owns the following assets on December 30 of the current year View the assets. View the additional information. Requirement What are the tax consequences of the distribution to the partnership, Alana, and the other partners? Start by completing a Sec. 751 nonliquidating distribution analysis. (If an input field is not used in the table or the balance is 0, leave the field empty; do not enter a zero. Round to the nearest dollar. Use a minus sign or parentheses in the Difference column if Alana gave up her interest in a particular property.) - X Sec. 751 assets: Total Sec. 751 assets Non-Sec. 751 assets: Total non-Sec. 751 assets Beginning Partnership Amount Alana's Interest Before Distribution (1/4) Alana's Interest After Hypothetical Distribution (1/5) Proportionate Actual Distribution Distribution Difference Assets Assets Cash Receivables Inventory Total Partnership's Basis $ Additional Information 100,000 $ 0 77,000 177,000 $ FMV 100,000 36,000 110,000 246,000 The partnership has no liabilities, and each partner's basis in his or her partnership interest is $30,000. On December 30 of the current year, Alana receives a current distribution of inventory having a $15,375 FMV, which reduces her partnership interest from one-fourth to one-fifth X
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Transcribed Image Text:The ABCD Partnership owns the following assets on December 30 of the current year:
View the assets.
View the additional information.
Requirement
What are the tax consequences of the distribution to the partnership, Alana, and the other partners?
Start by completing a Sec. 751 nonliquidating distribution analysis. (If an input field is not used in the table or the balance is 0, leave the field empty; do not enter a zero. Round to the nearest dollar. Use a minus sign or parentheses in the Difference column if Alana gave
up her interest in a particular property.)
Sec. 751 assets:
Total Sec. 751 assets
Non-Sec. 751 assets:
Total non-Sec. 751 assets
Beginning
Partnership
Amount
Alana's
Interest Before
Distribution
(1/4)
Alana's
Interest After Hypothetical
Distribution Proportionate
(1/5)
Distribution
(…)
Actual
Distribution Difference
Assets
Assets
Cash
Receivables
Inventory
Total
$
Partnership's Basis
$
Additional Information
100,000 $
0
77,000
177,000 $
FMV
100,000
36,000
110,000
246,000
The partnership has no liabilities, and each partner's basis in his or her partnership
interest is $30,000. On December 30 of the current year, Alana receives a current
distribution of inventory having a $15,375 FMV, which reduces her partnership
interest from one-fourth to one-fifth.
X
X
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