Question
AJ is a 30 percent partner in the Trane Partnership, a calendar-year-end entity. On January 1, AJ has an outside basis in his interest in
AJ is a 30 percent partner in the Trane Partnership, a calendar-year-end entity. On January 1, AJ has an outside basis in his interest in Trane of $78,000, which includes his share of the $54,000 of partnership liabilities. Trane generates $44,000 of income during the year and does not make any changes to its liabilities. On December 31, Trane makes a proportionate distribution of the following assets to AJ to terminate his partnership interest:
| Tax Basis | FMV | |
|---|---|---|
| Inventory | $ 60,000 | $ 71,000 |
| Land | 32,000 | 26,000 |
| Totals | $ 92,000 | $ 97,000 |
Note: Leave no answer blank. Enter zero if applicable.
c. What is AJ's basis in the distributed assets?
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Horngrens Financial And Managerial Accounting The Managerial Chapters And The Financial Chapters Plus Pearson Mylab Accounting With Pearson Global Edition
Authors: Tracie L. Miller Nobles, Brenda L. Mattison, Ella Mae Matsumura
6th Global Edition
1292270756, 978-1292270753
