Purchase Solution

# Computing partners recognized gain or loss

Not what you're looking for?

Need help answering questions (a), (b), (c), (d), (e), and (f)

Each of the following independent cases describes a liquidating distribution to a partner. Compute the partner?s recognized gain or loss and basis in any property received.
(a) Hobson Corporation received \$30,000 cash. Its outside basis was \$37,500.
(b) Mrs. Chang received \$30,000 cash. Her outside basis was \$22,000.
(c) Ms. Mallory received \$18,000 cash and a partnership capital asset (\$10,000 FMV and \$1,200 inside basis). Her outside basis was \$22,000.
(d) Dowling Inc. received \$6,300 cash and a partnership capital asset (\$50,000 FMV and \$45,000 inside basis). Its outside basis was \$30,000.
(e) Ms. Anitra received a partnership capital asset (\$100,000 FMV and \$70,000 inside basis). Her outside basis was \$40,000.
(f) Lincoln Corporation received \$20,000 cash and a partnership capital asset (\$3,000 FMV and \$2,200 inside basis). Its outside basis was \$19,000.

##### Solution Summary

The expert computes the partners which are recognized as gains or losses. The partnership for capital assets are given.

##### Solution Preview

(a) Hobson Corporation received \$30,000 cash. Its outside basis was \$37,500.
The cash is deemed distributed and reduces Hobson's outside basis to \$37,500-30,000=\$7,500

(b) Mrs. Chang received \$30,000 cash. Her outside basis was \$22,000.
partner gain = \$30,000 - \$22,000= \$8,000
partner gain recognition: When a partnership distribution is in the form of cash, gain must be recognized by the distributee partner to the extent that the money received exceeds the partner's adjusted basis in the partnership interest at the time of the distribution. (The computation of gain is made without regard to any other property that may be distributed concurrently. Any gain recognized in a distribution is treated as gain from the sale or exchange of a ...

##### Basic Social Media Concepts

The quiz will test your knowledge on basic social media concepts.

This quiz is designed to assess your current ability for determining the characteristics of ethical behavior. It is essential that leaders, managers, and employees are able to distinguish between positive and negative ethical behavior. The quicker you assess a person's ethical tendency, the awareness empowers you to develop a strategy on how to interact with them.

##### Employee Orientation

Test your knowledge of employee orientation with this fun and informative quiz. This quiz is meant for beginner and advanced students as well as professionals already working in the HR field.

##### Understanding the Accounting Equation

These 10 questions help a new student of accounting to understand the basic premise of accounting and how it is applied to the business world.

##### MS Word 2010-Tricky Features

These questions are based on features of the previous word versions that were easy to figure out, but now seem more hidden to me.