JJG Partnership, a calendar year, cash-method partnership has been in existence since 2015.
JJG's balance sheet as of June 30, 2018 is as follows:
Basis |
Fair Market Value |
|
Cash |
$30,000 |
$30,000 |
Accounts Receivable |
-0- |
30,000 |
Collectibles |
20,000 |
32,000 |
Land |
40,000 |
28,000 |
$90,000 |
$120,000 |
|
======== |
======== |
|
Capital, Jennie |
30,000 |
40,000 |
Capital, Jeff |
30,000 |
40,000 |
Capital, Greg |
30,000 |
40,000 |
$90,000 |
$120,000 |
|
======== |
======== |
Jennie sells her partnership interest to Norm on June 30, 2018 for $50,000. On June 30, 2018, Jennie's basis in her partnership interest was $30,000. Jennie made no contributions and did not receive any distributions from the partnership during 2018. The partnership's ordinary business income/loss for the year was ($6,000).
Compute Jennie's recognized gain/loss from the sale of her partnership interest and the character of the gain/loss.
Ans 1 | Amount received from the Norm | 50000 |
Less: Market value of Jennie share in the Firm | 38000 | |
Profit Earned by The Jennie | 12000 | |
Net Market value in the Firm of Jenni | 40000 | |
Less: Loss incurred (6000*1/3) i.e. Equal Share of all the Partners | 2000 | |
Market value of Jennie share in the Firm | 38000 | |
Ans 2 | Charter of Gain or Loss | |
Gain from the Change in Market Value (40000-30000) | 10000 | |
Other Gain (12000-10000) | 2000 | |
JJG Partnership, a calendar year, cash-method partnership has been in existence since 2015. JJG's balance sheet...
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