5.10 Aidy, Bo and Cody are the members of Lightstock LLC, a limited...
60.1K
Verified Solution
Link Copied!
Question
Accounting
5.10 Aidy, Bo and Cody are the members of Lightstock LLC, a limited liability company taxed as a partnership that is a retailer of incandescent light bulbs. Its balance sheet (with values added) is as follows: Lightstock's business prospects have dimmed in recent years, and Cody wants out. The partnership is short on cash, but it strikes a deal to liquidate Cody's interest with a distribution of some of its inventory of bulbs. The partnership distributes $25,000 worth of inventory to Cody and makes a section 754 election. What gain or loss does Cody recognize on this distribution and what is the amount of the partnership's section 734(b) adjustment? a) No gain or loss; negative adjustment of $14,000 b) Capital loss of $14,000; negative adjustment of $14,000 c) Capital loss of $14,000; positive adjustment of $14,000 d) Capital loss of $39,000; positive adjustment of $39,000
Answer & Explanation
Solved by verified expert
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
