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The Taurin Partnership (a calendar-year-end entity) has the following assets as of December 31 of the current year: Тах Basis FMV $ 49,800 16,600 87,000 $ 49,800 33,200 128,400 Cash Accounts receivable Inventory Totals $ 153,400 $ 211,400 On December 31, Taurin distributes $16,600 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 $43,533. cash, $11,067 (FMV) of accounts receivable, and $42,800 (FMV) of c1. If Emma's basis before the distribution was $60,033 rather than $43,533, what is Emma's recognized gain or loss? c2. What is her basis in the distributed assets? Complete this question by entering your answers in the tabs below. Req C1 Req C2 What is her basis in the distributed assets? (Do not round intermediate calculations. Round your final answers to the nearest whole dollar amount.) Basis Cash Accounts receivable Inventory

The Taurin Partnership (a calendar-year-end entity) has the following assets as of December 31 of the current year: Тах Basis FMV $ 49,800 16,600 87,000 $ 49,800 33,200 128,400 Cash Accounts receivable Inventory Totals $ 153,400 $ 211,400 On December 31, Taurin distributes $16,600 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 $43,533. cash, $11,067 (FMV) of accounts receivable, and $42,800 (FMV) of c1. If Emma's basis before the distribution was $60,033 rather than $43,533, what is Emma's recognized gain or loss? c2. What is her basis in the distributed assets? Complete this question by entering your answers in the tabs below. Req C1 Req C2 What is her basis in the distributed assets? (Do not round intermediate calculations. Round your final answers to the nearest whole dollar amount.) Basis Cash Accounts receivable Inventory

FINANCIAL ACCOUNTING
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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The Taurin Partnership (a calendar-year-end entity) has the following assets as of December 31 of the current year: Таx Basis FMV $ 49,800 16,600 $ 49,800 33,200 128,400 $ 211,400 Cash Accounts receivable Inventory 87,000 Totals $ 153,400 On December 31, Taurin distributes $16,600 of cash, $11,067 (FMV) of accounts receivable, and $42,800 (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 $43,533. c1. If Emma's basis before the distribution was $60,033 rather than $43,533, what is Emma's recognized gain or loss? c2. What is her basis in the distributed assets? Complete this question by entering your answers in the tabs below. Req C1 Req C2 What is her basis in the distributed assets? (Do not round intermediate calculations. Round your final answers to the nearest whole dollar amount.) Basis Cash Accounts receivable Inventory
Transcribed Image Text:The Taurin Partnership (a calendar-year-end entity) has the following assets as of December 31 of the current year: Таx Basis FMV $ 49,800 16,600 $ 49,800 33,200 128,400 $ 211,400 Cash Accounts receivable Inventory 87,000 Totals $ 153,400 On December 31, Taurin distributes $16,600 of cash, $11,067 (FMV) of accounts receivable, and $42,800 (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 $43,533. c1. If Emma's basis before the distribution was $60,033 rather than $43,533, what is Emma's recognized gain or loss? c2. What is her basis in the distributed assets? Complete this question by entering your answers in the tabs below. Req C1 Req C2 What is her basis in the distributed assets? (Do not round intermediate calculations. Round your final answers to the nearest whole dollar amount.) Basis Cash Accounts receivable Inventory
Expert Solution
Step 1

Part C1

 

Emma assigns a basis of $16,600 (1/3 * $49,800) to the cash, $5,533 to the accounts receivable (1/3 *16,600) and $29,000 (1/3 * $87,000) to the inventory. Since the sum exceeds her basis in Taurin, she has a required decrease of $7,600 ($51,133 - 43,533).

 

$8,900 of capital loss

Capital loss = adjusted bases - Emma's partnership interest = $51,133 - $60,033 = -$8,900

 

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