16. Jermaine sells his 25% partnership interest having a $50,000 basis to Michelle for $75,000 cash. At the time of the sale, the partnership has no liabilities and its assets are as follows: Basis FMV $25,000 Cash Unrealized receivables Inventory Land (Sec. 1231) $25,000 50,000 40,000 185,000 25,000 150,000 Jermaine and Michelle have no agreement concerning the allocation of the sales price. Ordinary income recognized by Jermaine as a result of the sale is A) $6,250. B) $12,500. C) $16,250. D) $22,500.
16. Jermaine sells his 25% partnership interest having a $50,000 basis to Michelle for $75,000 cash. At the time of the sale, the partnership has no liabilities and its assets are as follows: Basis FMV $25,000 Cash Unrealized receivables Inventory Land (Sec. 1231) $25,000 50,000 40,000 185,000 25,000 150,000 Jermaine and Michelle have no agreement concerning the allocation of the sales price. Ordinary income recognized by Jermaine as a result of the sale is A) $6,250. B) $12,500. C) $16,250. D) $22,500.
Chapter11: Partnerships: Distributions, Transfer Of Interests, And Terminations
Section: Chapter Questions
Problem 21CE
Related questions
Question
100%
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Individual Income Taxes
Accounting
ISBN:
9780357109731
Author:
Hoffman
Publisher:
CENGAGE LEARNING - CONSIGNMENT