Question
The LMN partnership has the following balance sheets: Basis FMV Land $41,000 $48,000 Inventory $25,000 $50,000 Unrealized Rec. $0 $45,000 Liabilities $15,000 $15,000 Capital, L
The LMN partnership has the following balance sheets:
|
|
| Basis | FMV | |
| Land |
| $41,000 | $48,000 | |
| Inventory |
| $25,000 | $50,000 | |
| Unrealized Rec. | $0 | $45,000 | ||
|
|
|
|
| |
| Liabilities |
| $15,000 | $15,000 | |
|
|
|
|
| |
| Capital, L |
| $17,000 | $42,667 | |
| Capital, M |
| $17,000 | $42,667 | |
| Capital, N |
| $17,000 | $42,666 | |
|
|
| $66,000 | $143,000 | |
If partner L (1/3 partner) sells his partnership interest (holding period = two years) to O for $ 50,000 cash, how much gain will L recognize, and what will be its character?
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Managerial Accounting Creating Value in a Dynamic Business Environment
Authors: Ronald Hilton, David Platt
10th edition
78025664, 978-0078025662
