Question

Rufus is a one-quarter partner in the Adventure Partnership. On January 1 of the current year, Adventure distributes $13,000 cash to Rufus in complete liquidation of his interest. Adventure has only capital assets and no liabilities at the date of the distribution. Rufus’s basis in his partnership interest is $9000. What is the amount Rufus' recognized gain or loss?

Answer 1

Here Rufus basis of partnership is $9000

But the payment from adventure partnership is $13000

Here we asked to calculated the gain of Rufus .

The partnership is in liquidation stage and they paid $13000 ti the return of his interest in the partnership firm then the gain of rufu is

Total amount received from partnership for his entire interest in firm less interest in firm

= 13000 - 9000 = 5000

Here the rufu is not given any loans to the partnership because adventure doesn't have any liabilities at the time of distribution so that we calculated the entire interest of rufu is $9000

So the gain of rufu is $5000.

By all the above explanation and points the gains of rufu is $5000.

These are all the points and explanation for the above given question .

I hope, all the above mentioned points, calculations and explanations are useful and helpful to you.

Thank you.