AJ is a 30% partner in the Trane partnership, a calendar year end entity. On January 1, AJ has an outside basis in his interest in Trane of S73,000, which includes his share of the $50,000 of partnership liabilities. Trane generates $42,000 of income during the year and does not make any changes to its liabilities. On December 31, Trane makes a proportionate distribution of the following assets to AJ to terminate his partnership interest: Tax Basis FMV Inventory $ 56,000 S 65,000 Land 30,000 25,000 Totals S 86,000 $90,000 What is the amount of any recognized gain or loss to AJ? Same facts as the prior question, what is AJ's basis in the land?
AJ is a 30% partner in the Trane partnership, a calendar year end entity. On January 1, AJ has an outside basis in his interest in Trane of S73,000, which includes his share of the $50,000 of partnership liabilities. Trane generates $42,000 of income during the year and does not make any changes to its liabilities. On December 31, Trane makes a proportionate distribution of the following assets to AJ to terminate his partnership interest: Tax Basis FMV Inventory $ 56,000 S 65,000 Land 30,000 25,000 Totals S 86,000 $90,000 What is the amount of any recognized gain or loss to AJ? Same facts as the prior question, what is AJ's basis in the land?
Chapter14: Choice Of Business Entity—operations And Distributions
Section: Chapter Questions
Problem 47P
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Transcribed Image Text:AJ is a 30% partner in the Trane partnership, a calendar year end entity. On January 1, AJ has an
outside basis in his interest in Trane of $73,000, which includes his share of the $50,000 of partnership
liabilities. Trane generates $42,000 of income during the year and does not make any changes to its
liabilities. On December 31, Trane makes a proportionate distribution of the following assets to AJ to
terminate his partnership interest:
Tax Basis
FMV
Inventory
$ 56,000
$ 65,000
Land
30,000
25,000
Totals
$ 86,000
$90,000
What is the amount of any recognized gain or loss to AJ?
Same facts as the prior question, what is AJ's basis in the land?
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ISBN:
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Author:
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Publisher:
CENGAGE LEARNING - CONSIGNMENT