Reference no: EM132648478
Problem - Paula's basis in her partnership interest is $60,000. In liquidation of her interest, the partnership makes a proportionate distribution to Paula of $20,000 of cash and inventory (basis of $5,000 and value of $7,000). No "other property" was distributed. (Assume that the partnership then liquidates.)
Required -
a. Use the format of Concept Summary 11.2 to create a spreadsheet to calculate the effects of the distribution. Set up an Input area for the amounts on lines 1, 2, 5, and 8. Code the formulas shown in the Calculations section of the concept summary to calculate the amounts in the remaining lines. You will use "sum," "min," "max," and "if/then/else" formulas. Enter Paula's relevant facts in the input section of your spreadsheet.
b. Based on the information in your spreadsheet, how much gain or loss, if any, will Paula recognize on the distribution?
c. What basis will Paula take in the inventory?
d. What happens if the partnership also distributes artwork to Paula with a basis of $1,000 and a fair market value of $30,000? Adjust the input section of your spreadsheet, and explain your findings.
e. Return to the original facts. Conceptually, how would your answer to part (b) or (c) change if this had been a current distribution? (You do not need to create a spreadsheet for the current distribution rules.) Explain.
|
Calculate the number of units in the first year
: Calculate the number of units (in total and per product) - in the first year of the two products - to earn the same profit as for 2015.
|
|
What basis will Jamie take in each parcel
: The partnership holds both parcels of land for investment, and the parcels have fair market values of $20,000 each. What basis will Jamie take in each parcel
|
|
Calculate the break-even in units and sales dollars
: Calculate the break-even in units and sales dollars for 2015. Break-even: Single product; profit calculation; second product introduced.
|
|
How does the omission affect daisy
: The only transaction or event that was not properly recorded in 2019. How does this omission affect Daisy's 2019 ?nancial statements?
|
|
What basis will Paula take in the inventory
: Based on the information in your spreadsheet, how much gain or loss, if any, will Paula recognize on the distribution? What basis Paula take in the inventory
|
|
Determine que basis in land recevied
: Que buys the land for $16,000 and signs a mortgage. Show the formula used to determine Que's basis in the land received
|
|
Determine gain or loss realized and recognized on a sale
: $30,000 that is subject to a $3,000 mortgage. Show the formula to determine gain or loss realized and recognized on a sale or exchange of property.
|
|
What basis will Parker take in the inventory and land
: Parker's basis in his PQ Partnership interest is $180,000. What basis will Parker take in the inventory and land
|
|
What is que adjusted basis in the new land
: What is Que's adjusted basis and holding period in the new land? Later Que swaps the land for new land worth $30,000 that is subject to a $3,000 mortgage.
|