. What are the amount and character of Megan's recognized gain or loss? b. What is Megan's basis in the distributed assets? c. What are the amount and character of Matthew's recognized gain or
. What are the amount and character of Megan's recognized gain or loss? b. What is Megan's basis in the distributed assets? c. What are the amount and character of Matthew's recognized gain or
Chapter14: Choice Of Business Entity—operations And Distributions
Section: Chapter Questions
Problem 47P
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Question
a. What are the amount and character of Megan's recognized gain or loss?
b. What is Megan's basis in the distributed assets?
c. What are the amount and character of Matthew's recognized gain or loss?
d. What is Matthew's basis in the distributed assets?
Transcribed Image Text:Megan and Matthew are equal partners in the J & J Partnership (a calendar-year-end entity). On January 1 of
the current year, they decide to liquidate the partnership. Megan's basis in her partnership interest is
$124,000 and Matthew's is $44,600. The two partners receive identical distributions, with each receiving the
following assets:
Note: Leave no answer blank. Enter zero if applicable.
Cash
Inventory
Land
Totals
Tax Basis
FMV
$36,000 $ 36,000
8,600
9,840
1,100
1,720
$ 45,700 $ 47,560
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