Gain (Loss) on termination of partnership
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Current assets as of Dec 1
Cash Basis 45000 FMV 45000
AR Basis 15000 FMV 30000
Inventory Basis 81000 FMV 120000
On Dec 1 I have terminated my partnership interest of which I am 1/3 partnership in and received
15000 cash
10000 FMV Accounts receivable
40000 Inventory FMV
I have 40000 basis in the company prior to distribution
Please give basis in each of the following
Cash
AR
Inventory
Also if I up my basis to 55000 instead of 40000 what would be my gain or loss recognized and basis in the following?
Cash
AR
Inventory
Please show work and calculations.
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This cited solution explains the concepts for allocating basis in the termination of a partnership.
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Gain (Loss) on termination of partnership.
Distributions received:
Cash $15,000
AR at FMV 10,000
Inventory at FMV 40,000 65,000
Outside basis ...
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