Question
The PW partnership's balance sheet includes the following assets immediately before it liquidates: Basis FMV Cash $10,000 $10,000 Unrealized receivables -0- 10,000 Total $10,000 $20,000
The PW partnership's balance sheet includes the following assets immediately before it liquidates:
|
| Basis |
| FMV |
| Cash | $10,000 |
| $10,000 |
| Unrealized receivables | -0- |
| 10,000 |
| Total | $10,000 |
| $20,000 |
|
| |||
In complete liquidation, PW distributes the cash to Pamela and the unrealized receivables to Wade (equal partners). Pamela and Wade each have an outside basis in PW equal to $5,000. PW has no liabilities at the time of the liquidation.
a. What is the amount and character of Pamela's recognized gain or loss?
b. What is the amount and character of Wade's recognized gain or loss?
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Contemporary Auditing University Of Southern Indiano
Authors: Michael C. Knapp
7th Edition
0324658052, 978-0324658057
