Question
Jim owns 10% of Trusted Bike Shop (TBS). He has decided to sell his interest to Tim for $75000 plus the assumption of his share
Jim owns 10% of Trusted Bike Shop (TBS). He has decided to sell his interest to Tim for $75000 plus the assumption of his share of the liabilities. Assuming inside and outside basis are the same, and the following balance sheet items:
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| Tax Basis | FMV |
| Cash | 50,000 | 50,000 |
| A/R | 40,000 | 40,000 |
| Inventory | 10,000 | 40,000 |
| Land | 33,000 | 30,000 |
| Liabilities | 100,000 |
|
| Capital - Jim | 10,000 |
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| Capital Mary | 40,000 |
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| Capital - Sue | 40,000 |
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What is the amount and character of Jims gain or loss?
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Auditing And Society Research On Audit Practice And Regulations
Authors: Wally Smieliauskas, Minlei Ye, Ping Zhang
1st Edition
1138314129, 978-1138314122
