Question

of disposition LAR Partner A wishes to sell her interest in a partnership to a outside date individual. Her adjusted basis at the an of dism is $15ooo. The partnership Property is valued as follows: Book! FMV Cash 0 Inventory 75,000 Land 12,000 Equipment 10,000 sale? (realized Not recognized) 1. What is the realized gain on the 2. what portion of the realized gain is ordinary income? * Partner A and 3 others hold equal shares. 48.000 36,000 100,000 80,000 50,000

Answer 1

1..
Computation of realisation gain on sales :
Assets	Book value	FMV	Difference
	$	$	$
Cash	48000	48000	0
Account receivable	0	36000	36000
Inventory	75000	100000	25000
Land	50000	80000	30000
Equipment	10000	12000	2000
Total	183000	276000	93000
Hence , Realisation gain=$93000
2..
Answer:
Computation of portion of realisation gain in ordinary income:
Assets	Book value	FMV	Difference
	$	$	$
Cash	48000	48000	0
Account receivable	0	36000	36000
Inventory	75000	100000	25000
Total	123000	184000	61000
Hence , realisation gaing on ordinary income= $61000
Notes:
calculation of distribution of realisation gain between A and other 3 partners:
Portion of A = $93000 *1/4
= $23250	23250	7750
we know that every partner holds equal share then every partner get equal interest on realisation gain i.e.,$23250 each
Again , if the realisation gain is not recognised then the portion of gain A shall compenseted by remaining partner in the portion of their profit sharing ratio:
other parners capital a/c
		7750
		7750
		7750
A's capital a/c			23250