On January 1, 2020, Johnathan sold his 25% partnership interest in Jazz Partnership, to Robert for $120,000 plus the assumption of his share of Jazz Partnership liabilities. Before selling his interest, Johnathan had an outside basis in his Jazz Partnership interest of $80,000, which includes his $20,000 share of Jazz Partnership liabilities. Jazz Partnership had the following asset and liabilities at the date of sale: Tax Basis 150,000 FMV 150,000 Cash 40,000 50,000 Accounts Receivable 52,000 70,000 Inventory Land 20,000 288,000 Liabilities 80,000 a) What is the amount and character of any gain or loss recognized by Johnathan on the sale of his partnership interest? b) What basis does Robert take in his newly acquired partnership interest in Jazz Partnership?
On January 1, 2020, Johnathan sold his 25% partnership interest in Jazz Partnership, to Robert for $120,000 plus the assumption of his share of Jazz Partnership liabilities. Before selling his interest, Johnathan had an outside basis in his Jazz Partnership interest of $80,000, which includes his $20,000 share of Jazz Partnership liabilities. Jazz Partnership had the following asset and liabilities at the date of sale: Tax Basis 150,000 FMV 150,000 Cash 40,000 50,000 Accounts Receivable 52,000 70,000 Inventory Land 20,000 288,000 Liabilities 80,000 a) What is the amount and character of any gain or loss recognized by Johnathan on the sale of his partnership interest? b) What basis does Robert take in his newly acquired partnership interest in Jazz Partnership?
Chapter21: Partnerships
Section: Chapter Questions
Problem 11BCRQ
Related questions
Question
Transcribed Image Text:On January 1, 2020, Johnathan sold his 25% partnership interest in Jazz Partnership, to
Robert for $120,000 plus the assumption of his share of Jazz Partnership liabilities.
Before selling his interest, Johnathan had an outside basis in his Jazz Partnership
interest of $80,000, which includes his $20,000 share of Jazz Partnership liabilities.
Jazz Partnership had the following asset and liabilities at the date of sale:
Тах Basis
FMV
150,000
Cash
150,000
40,000
50,000
Accounts Receivable
52,000
70,000
Inventory
Land
20,000
288,000
Liabilities
80,000
a) What is the amount and character of any gain or loss recognized by Johnathan on
the sale of his partnership interest?
b) What basis does Robert take in his newly acquired partnership interest in Jazz
Partnership?
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 4 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