Problem 2: The JKLM Partnership owns the following assets on October 1 of the current year Cash Asset Receivables Inventory Machinery Land Total Property Basis 12000 3000 5250 47500 9125 76875 FMV 12000 3000 6000 60000 19000 100000 *Sale of machinery for its FMV would result in $12.500 of $1245 depreciation recapture. Thus, the machinery's FMV and original cost are the same numerical value. Which partnership items are unrealized receivables? 1. Is the partnership's inventory substantially appreciated? 2. Assume the JKLM Partnership has no liabilities and Jack's basis in his partnership interest is $50,000. On October 1 of the current year, Jack receives a $ 6,250 current distribution in cash, which reduces his partnership interest from one- fourth to one-fifth. What are the tax results of the distribution (i. e., the amount and character of any gain, loss, or income recognized and Jack's basis in his partnership interest)

Problem 2: The JKLM Partnership owns the following assets on October 1 of the current year "Sale of machinery for its FMV would result in $12,500 of $1245 depreciation recapture. Thus, the machinery's FMV and original cost are the same numerical value. Which partnership items are unrealized receivables? 1. Is the partnership's inventory substantially appreciated? 2. Assume the JKLM Partnership has no liabilities and Jack's basis in his partnership interest is $50,000. On October 1 of the current year, Jack receives a $6,250 current distribution in cash, which reduces his partnership interest from onefourth to one-fifth. What are the tax results of the distribution (i. e., the amount and character of any gain, loss, or income recognized and Jack's basis in his partnership interest)