Question
In: Finance
The PQRS Partnership owns the following assets on December 30 of the current? year: Assets Partnership's...
The PQRS Partnership owns the following assets on December 30 of the current? year:
|
Assets |
Partnership's Basis |
FMV |
|
Cash |
$20,000 |
$20,000 |
|
Receivables |
0 |
40,000 |
|
Inventory |
80,000 |
100,000 |
|
Total |
$100,000 |
$160,000 |
The partnership has no? liabilities, and each? partner's basis in his or her partnership interest is $25,000.On December 30 of the current? year,Paula receives a current distribution of inventory having a $10,000 FMV, which reduces her partnership interest from? one-fourth to? one-fifth.
Requirement
What are the tax consequences of the distribution to the? partnership,Paula?,and the other? partners?
|
Paula's |
Paula's |
||||||
|
Beginning |
Interest Before |
Interest After |
Hypothetical |
||||
|
Partnership |
Distribution |
Distribution |
Proportionate |
Actual |
|||
|
Amount |
(1/4) |
(1/5) |
Distribution |
Distribution |
Difference |
||
|
Sec. 751 assets: |
|||||||
|
Total Sec. 751 assets |
|||||||
|
Non-Sec. 751 assets: |
|||||||
|
Total non-Sec. 751 assets |
|||||||
Solutions
jeff jeffy answered 3 years agoRelated Solutions
Mary is a 50% general partner in the WJM Partnership. The partnership's records for the current...
Mary is a 50% general partner in the WJM Partnership. The
partnership's records for the current year show the
following:
Gross receipts from sales
$670,000
Cost of sales
(500,000)
Advertising expense
(96,000)
Charitable contributions
(25,000)
Dividend income
48,000
Guaranteed payment to Mary
(12,000)
Short-term capital loss
(30,000)
Mary's outside basis at the beginning of the current year was
$125,000. During the year, partnership
liabilities decreased by $80,000 and the partnership made cash
distributions to Mary of $55,000.
Required:
(a) Calculate...
Andrew and Beth are equal partners in the AB Partnership. On December 30 of the current...
Andrew and Beth are equal partners in the AB Partnership. On
December 30 of the current year, the AB Partnership agrees to
liquidate Andrew’s partnership interest for a cash payment on
December 30 of each of the next five years. What tax issues should
Andrew and Beth consider with respect to the liquidation of
Andrew’s partnership interest?
Following is the current balance sheet for a local partnership of doctors:Cash and current assets $...
Following is the current balance sheet for a local partnership
of doctors:Cash and current assets $ 78,000 Liabilities $ 82,000
Land 242,000 A, capital 62,000 Building and equipment (net) 200,000
B, capital 82,000 C, capital 132,000 D, capital 162,000 Totals $
520,000 Totals $ 520,000 The following questions represent
independent situations: E is going to invest enough money in this
partnership to receive a 25 percent interest. No goodwill or bonus
is to be recorded. How much should E invest?...
Following is the current balance sheet for a local partnership of doctors: Cash and current assets...
Following is the current balance sheet for a local partnership
of doctors:
Cash and current assets
$
78,000
Liabilities
$
70,000
Land
212,000
A, capital
50,000
Building and equipment
(net)
170,000
B, capital
70,000
C, capital
120,000
D, capital
150,000
Totals
$
460,000
Totals
$
460,000
The following questions represent independent
situations:
E is going to invest enough money in this partnership to receive
a 25 percent interest. No goodwill or bonus is to be recorded. How
much should E...
Following is the current balance sheet for a local partnership of doctors: Cash and current assets...
Following is the current balance sheet for a local partnership
of doctors:
Cash and current assets
$
81,000
Liabilities
$
78,000
Land
236,000
A, capital
58,000
Building and equipment (net)
183,000
B, capital
78,000
C, capital
128,000
D, capital
158,000
Totals
$
500,000
Totals
$
500,000
The following questions represent independent
situations:
E is going to invest enough money in this partnership to receive
a 20 percent interest. No goodwill or bonus is to be recorded. How
much should E...
Following is the current balance sheet for a local partnership of doctors: Cash and current assets...
Following is the
current balance sheet for a local partnership of doctors:
Cash and current
assets
$
43,000
Liabilities
$
60,000
Land
202,000
A, capital
40,000
Building and
equipment (net)
165,000
B, capital
60,000
C, capital
110,000
D, capital
140,000
Totals
$
410,000
Totals
$
410,000
The following
questions represent independent situations:
E is going to invest
enough money in this partnership to receive a 20 percent interest.
No goodwill or bonus is to be recorded. How much should E...
Following is the current balance sheet for a local partnership of doctors: Cash and current assets...
Following is the current balance sheet for a local partnership
of doctors:
Cash and current assets
$
37,000
Liabilities
$
52,000
Land
172,000
A, capital
32,000
Building and equipment (net)
161,000
B, capital
52,000
C, capital
102,000
D, capital
132,000
Totals
$
370,000
Totals
$
370,000
The following questions represent independent
situations:
E is going to invest enough money in this partnership to receive
a 25 percent interest. No goodwill or bonus is to be recorded. How
much should E...
Following is the current balance sheet for a local partnership of doctors: Cash and current assets...
Following is the current balance sheet for a local partnership
of doctors:
Cash and current assets
$
60,000
Liabilities
$
72,000
Land
230,000
A, capital
52,000
Building and equipment (net)
180,000
B, capital
72,000
C, capital
122,000
D, capital
152,000
Totals
$
470,000
Totals
$
470,000
The following questions represent independent
situations:
E contributes $105,000 in cash to the business to receive a 20
percent interest in the partnership. Goodwill is to be recorded.
Profits and losses have previously been...
Following is the current balance sheet for a local partnership of doctors: Cash and Current Assets...
Following is the current balance sheet for a local partnership
of doctors: Cash and Current Assets $ 39,000 Liabilities $ 52,000
Land 234,000 Adams, cap 26,000 Building 130,000 Barnes, cap 52,000
Cordas, cap 117,000 Total $403,000 Davis, cap 156,000 Total
$403,000
a. Eden contributes $80,000 into the partnership for a 25%
interest. The four original partners share profits and losses
equally. Using the bonus method, prepare the journal entry to
record Eden's admission
. b. Instead of contributing $80,000 as...
Following is the current balance sheet for a local partnership of doctors: Cash and current assets...
Following is the current balance sheet for a local partnership
of doctors:
Cash and current
assets . . . . . . . . . . . . . . . . . . . . .
$ 30,000
Land . . . . . . . . . . . . . . . . . . . . . . .
180,000
Building and equipment
(net) . . . . . . . . . . . ....
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