a. How much gain or loss does Neil recognize on this distribution?
b. What is Neil’s basis in the receivables and land he receives in the distribution?
c. What is Neil’s basis in the LLC interest following the distribution?
In a proportionate current (nonliquidating) distribution of his 30% interest in the MNO LLC, Neil received cash ($60,000), land (basis of $40,000 and value of $75,000), and unrealized receivables (ba...
Parker’s basis in his PQ Partnership interest is $180,000. Parker receives a pro rata liquidating distribution consisting of $20,000 cash, land with a basis of $80,000 and a fair market value of $100,000, and his proportionate share of inventory with a basis of $60,000 to PQ and a fair market value of $75,000. Assume that PQ also liquidates. How much gain or loss, if any, must Parker recognize on the distribution? What basis will Parker take in the inventory and...
interest is $50,000. His distribution includes cash of $5,000, inventory (FMV -$20,000; basis $10,000), and equipment (FMV $2,000; basis $1,000). Sam's marginal tax rate is 24% and his long-term capital gains tax rate is 15%. 2. Sam receives a proportionate nonliquidating distribution when the basis of his partnership a. How much gain or loss does Sam recognize? Gain /Loss) b. What is Sam's tax liability/benefit on the distribution? (Liability /Benefit) c. What is Sam's basis in the inventory? d. What...
In a proportionate liquidating distribution in which the partnership is liquidated, Bill received cash of $120,000, inventory (basis of $6,000, fair market value of $8,000), and a capital asset (basis and fair market value of $16,000). Immediately before the distribution, Bill’s basis in the partnership interest was $90,000. a. How much gain or loss will Bill recognize on the distribution? b. What is Bill’s basis in the inventory and the capital asset? CLUES: a. Bill will recognize a gain to...
Dave LaCroix recently received a 10 percent capital and profits interest in Cirque Capital LLC in exchange for consulting services he provided. If Cirque Capital had paid an outsider to provide the advice, it would have deducted the payment as compensation expense. Cirque Capital’s balance sheet on the day Dave received his capital interest appears below: Basis Fair Market Value Assets: Cash $ 210,000 $ 210,000 Investments 100,000 126,000 Land 290,000 420,000 Totals $ 600,000 $ 756,000 Liabilities and capital:...