(10) In a liquidating distribution, Janice Rand receives cash of $40,000, inventory (basis of $18,000 and FMV of $27,566) and land (basis of 15,000 and FMV of $250,000). Her basis in her interest of Yeoman LLC is $80,000. (a) What is her gain or loss on the distribution? (b) What is her basis in the inventory? (c) What is her basis in the land? (d) What if Yeoman LLC only distributed the cash and the inventory to Janice in exchange for her partnership interest? How much gain or loss will she recognize and what would be her basis in the inventory?
(10) In a liquidating distribution, Janice Rand receives cash of $40,000, inventory (basis of $18,000 and FMV of $27,566) and land (basis of 15,000 and FMV of $250,000). Her basis in her interest of Yeoman LLC is $80,000. (a) What is her gain or loss on the distribution? (b) What is her basis in the inventory? (c) What is her basis in the land? (d) What if Yeoman LLC only distributed the cash and the inventory to Janice in exchange for her partnership interest? How much gain or loss will she recognize and what would be her basis in the inventory?
Chapter20: Corporations: Distributions In Complete Liquidation And An Overview Of Reorganizations
Section: Chapter Questions
Problem 15CE
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Transcribed Image Text:(10) In a liquidating distribution, Janice Rand receives cash of $40,000, inventory (basis of
$18,000 and FMV of $27,566) and land (basis of 15,000 and FMV of $250,000). Her basis
in her interest of Yeoman LLC is $80,000.
(a)
What is her gain or loss on the distribution?
(b) What is her basis in the inventory?
(c)
What is her basis in the land?
(d) What if Yeoman LLC only distributed the cash and the inventory to Janice in
exchange for her partnership interest? How much gain or loss will she recognize
and what would be her basis in the inventory?
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ISBN:
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Author:
Hoffman
Publisher:
CENGAGE LEARNING - CONSIGNMENT