The Taurin Partnership (a calendar-year-end entity) has the following assets as of December 31 of the current year: Tax Basis FMV Cash $ 48,360 $ 48,360 Accounts receivable 16,120 32,240 Inventory 85,200 125,880 Totals $ 149,680 $ 206,480 On December 31, Taurin distributes $16,120 of cash, $10,747 (FMV) of accounts receivable, and $41,960 (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 $42,473. c1. If Emma's basis before the distribution was $58,523 rather than $42,473, what is Emma's recognized gain or loss? c2. What is her basis in the distributed assets?
The Taurin Partnership (a calendar-year-end entity) has the following assets as of December 31 of the current year: Tax Basis FMV Cash $ 48,360 $ 48,360 Accounts receivable 16,120 32,240 Inventory 85,200 125,880 Totals $ 149,680 $ 206,480 On December 31, Taurin distributes $16,120 of cash, $10,747 (FMV) of accounts receivable, and $41,960 (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 $42,473. c1. If Emma's basis before the distribution was $58,523 rather than $42,473, what is Emma's recognized gain or loss? c2. What is her basis in the distributed assets?
Chapter28: Income Taxati On Of Trusts And Estates
Section: Chapter Questions
Problem 19P
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The Taurin
| Tax Basis | FMV | |
|---|---|---|
| Cash | $ 48,360 | $ 48,360 |
| Accounts receivable | 16,120 | 32,240 |
| Inventory | 85,200 | 125,880 |
| Totals | $ 149,680 | $ 206,480 |
On December 31, Taurin distributes $16,120 of cash, $10,747 (FMV) of accounts receivable, and $41,960 (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 $42,473.
c1. If Emma's basis before the distribution was $58,523 rather than $42,473, what is Emma's recognized gain or loss?
c2. What is her basis in the distributed assets?
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