he Whitewater LLP is equally owned by three partners and shows the following balance sheet at the end of the current tax year.   Basis   FMV Cash $81,000 $81,000 Unrealized receivables 0 27,000 Land 27,000 108,000   $108,000 $216,000 Petula, capital $36,000 $72,000 Prudence, capital 36,000 72,000 Primrose, capital 36,000 72,000   $108,000 $216,000   Partner Petula is an active (i.e., "general") partner retiring from the service-oriented partnership. She receives $81,000 cash, none of which is stated to be for goodwill. a.  How much of the payment is for "unstated goodwill"?   b.  How is the $81,000 allocated between a § 736(a) income payment and a § 736(b) property payment? The $81,000 cash payment is allocated as follows: § 736(a) income payment:  § 736(b) property payment:

SWFT Corp Partner Estates Trusts
42nd Edition
ISBN:9780357161548
Author:Raabe
Publisher:Raabe
Chapter11: Partnerships: Distributions, Transfer Of Interests, And Terminations
Section: Chapter Questions
Problem 18CE
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he Whitewater LLP is equally owned by three partners and shows the following balance sheet at the end of the current tax year.

  Basis   FMV
Cash $81,000 $81,000
Unrealized receivables 0 27,000
Land 27,000 108,000
  $108,000 $216,000
Petula, capital $36,000 $72,000
Prudence, capital 36,000 72,000
Primrose, capital 36,000 72,000
  $108,000 $216,000

 

Partner Petula is an active (i.e., "general") partner retiring from the service-oriented partnership. She receives $81,000 cash, none of which is stated to be for goodwill.

a.  How much of the payment is for "unstated goodwill"?

 

b.  How is the $81,000 allocated between a § 736(a) income payment and a § 736(b) property payment?

The $81,000 cash payment is allocated as follows:
§ 736(a) income payment: 
§ 736(b) property payment: 

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