Green, Black, and Blue each own one-third of Color Partnership. Each has a zero outside basis in their partnership interest. Color is a cash basis service company whose sole assets are $600 in accounts receivable. The partnership has no liabilities. Green sells his partnership interest to Purple at a Fair Market Value of $200. How much, if any gain or loss does Green recognize on the sale of the partnership interest? If there is a recognized gain or loss by Green what is the character of it? If no gain or loss enter $0? What is Purple's basis in the partnership?
Green, Black, and Blue each own one-third of Color Partnership. Each has a zero outside basis in their partnership interest. Color is a cash basis service company whose sole assets are $600 in accounts receivable. The partnership has no liabilities. Green sells his partnership interest to Purple at a Fair Market Value of $200. How much, if any gain or loss does Green recognize on the sale of the partnership interest? If there is a recognized gain or loss by Green what is the character of it? If no gain or loss enter $0? What is Purple's basis in the partnership?
SWFT Essntl Tax Individ/Bus Entities 2020
23rd Edition
ISBN:9780357391266
Author:Nellen
Publisher:Nellen
Chapter14: Partnerships And Limited Liability Entities
Section: Chapter Questions
Problem 9P
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Green, Black, and Blue each own one-third of Color Partnership. Each has a zero outside basis in their partnership interest. Color is a cash basis service company whose sole assets are $600 in accounts receivable. The partnership has no liabilities. Green sells his partnership interest to Purple at a Fair Market Value of $200.
- How much, if any gain or loss does Green recognize on the sale of the partnership interest?
- If there is a recognized gain or loss by Green what is the character of it? If no gain or loss enter $0?
- What is Purple's basis in the partnership?
- Assume no elections are made at the partnership level. When the receivable is collected how much income is allocated to Purple.
- After the receivables are collected what is Purple's outside adjusted basis in the partnership?
- If the partnership liquidates distributing $200 to each partner if Purple recognizes gain or loss indicate the amount if a loss enter in parentheses if no gain or loss enter $0
- If Purple recognizes gain or loss on the distribution, what is the character of the gain or loss, if no gain then put "n/a"
- How much if anything is Black's gain or loss on receipt of her $200 from Color? If none, enter $0
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