Megan and Matthew are equal partners in the J & J partnership (calendar-year-end entity). On January 1

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Megan and Matthew are equal partners in the J & J partnership (calendar-year-end entity). On January 1 of the current year, they decide to liquidate the partnership. Megan's basis in her partnership interest is $100,000 and Matthew's is $35,000. The two partners receive identical distributions with each receiving the following assets:
.........................Tax Basis....................FMV
Cash....................$ 30,000................$ 30,000
Inventory..................5,000....................6,000
Land.........................500....................1,000
Totals...................$ 35,500................$37,000
a. What is the amount and character of Megan's recognized gain or loss?
b. What is Megan's basis in the distributed assets?
c. What is the amount and character of Matthew's recognized gain or loss?
d. What is Matthew's basis in the distributed assets?
Partnership
A legal form of business operation between two or more individuals who share management and profits. A Written agreement between two or more individuals who join as partners to form and carry on a for-profit business. Among other things, it states...
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Taxation Of Individuals And Business Entities 2015

ISBN: 9780077862367

6th Edition

Authors: Brian Spilker, Benjamin Ayers, John Robinson, Edmund Outslay, Ronald Worsham, John Barrick, Connie Weaver

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