Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

5. Ralph and Sandy are equal general partners in a funeral home business. The RS Partnership reports income from sales of caskets on the accrual

image text in transcribed
5. Ralph and Sandy are equal general partners in a funeral home business. The RS Partnership reports income from sales of caskets on the accrual method and income from services on the cash method, The assets of the RS Partnership, including goodwill, are as follows: Asset Adjusted Basis F.M.V. Cash $ 20,000 $ 20,000 Accounts Receivable $ 20,000 $ 50,000 Inventory $ 50,000 $ 70,000 Funeral Home $150,000 $200,000 Equipment $ 60,000 $100,000 Goodwill $ 0 $ 60,000 All of the gain inherent in the equipment is $ 1245 gain; none of the gain inherent in the funeral home is $ 1245 gain. Ralph's basis for his interest in the RS Partnership is $150,000. Ralph sold his interest in the partnership to Sandy for $520,000, of which $130,000 was payable at the closing. The remaining $390,000, with adequate interest, was due two years later. To what extent may Ralph report the sale using the $ 453 installment method? 5. Ralph and Sandy are equal general partners in a funeral home business. The RS Partnership reports income from sales of caskets on the accrual method and income from services on the cash method, The assets of the RS Partnership, including goodwill, are as follows: Asset Adjusted Basis F.M.V. Cash $ 20,000 $ 20,000 Accounts Receivable $ 20,000 $ 50,000 Inventory $ 50,000 $ 70,000 Funeral Home $150,000 $200,000 Equipment $ 60,000 $100,000 Goodwill $ 0 $ 60,000 All of the gain inherent in the equipment is $ 1245 gain; none of the gain inherent in the funeral home is $ 1245 gain. Ralph's basis for his interest in the RS Partnership is $150,000. Ralph sold his interest in the partnership to Sandy for $520,000, of which $130,000 was payable at the closing. The remaining $390,000, with adequate interest, was due two years later. To what extent may Ralph report the sale using the $ 453 installment method

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

More Books

Students also viewed these Accounting questions

Question

Guidelines for Informative Speeches?

Answered: 1 week ago