Question
The Taurin Partnership (a calendar-year-end entity) has the following assets as of December 31 of the current year: Tax Basis FMV Cash $ 47,400 $
The Taurin Partnership (a calendar-year-end entity) has the following assets as of December 31 of the current year:
| Tax Basis | FMV | |
|---|---|---|
| Cash | $ 47,400 | $ 47,400 |
| Accounts receivable | 15,800 | 31,600 |
| Inventory | 84,000 | 124,200 |
| Totals | $ 147,200 | $ 203,200 |
On December 31, Taurin distributes $15,800 of cash, $10,533 (FMV) of accounts receivable, and $41,400 (FMV) of inventory to Emma (a one-third partner) in termination of her partnership interest. Emma's basis in her partnership interest immediately prior to the distribution is $41,767.
a. What are the amount and character of Emma's recognized gain or loss on the distribution?
b. What is Emma's basis in the distributed assets?
c1. If Emma's basis before the distribution was $57,517 rather than $41,767, what is Emma's recognized gain or loss?
c2. What is her basis in the distributed assets?
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Introduction To Financial Accounting
Authors: CHARLES T. HORNGREN AND ET ALL.
11th Edition
9352862473, 978-9352862474
