Question
1. The XYZ partnership had the following balance sheet: Basis FMV Cash $30,000 $30,000 Accounts Receivable 0 48,000 Land 36,000 93,000 Goodwill 0 15,000 $66,000
1. The XYZ partnership had the following balance sheet:
|
|
| Basis | FMV | |
| Cash |
| $30,000 | $30,000 | |
| Accounts Receivable | 0 | 48,000 | ||
| Land | 36,000 | 93,000 | ||
| Goodwill | 0 | 15,000 | ||
|
|
| $66,000 | $186,000 | |
| Capital, X |
| $22,000 | $62,000 | |
| Capital, Y |
| 22,000 | 62,000 | |
| Capital, Z |
| 22,000 | 62,000 | |
|
|
| $66,000 | $186,000 | |
In liquidation of his interest X receives a distribution equal to 50% of partnership income for each of the first two years after his retirement. Partnership income was $80,000 in each of those years. X was a general partner, capital was not a material income-producing factor for the partnership, and the partnership agreement specified that a retiring partner would be paid for their share of goodwill. How would the retirement payment be treated by X and the partnership?
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Guidelines For Auditing Process Safety Management Systems
Authors: CCPS Center For Chemical Process Safety
2nd Edition
0470282355, 978-0470282359
