In a proportionate liquidating distribution in which the partnership is also liquidated, Tom received cash...
60.1K
Verified Solution
Link Copied!
Question
Accounting
In a proportionate liquidating distribution in which the partnership is also liquidated, Tom received cash of $30,000, accounts receivable (basis of $0, fair market value of $20,000), and land (basis of $1,000, fair market value of $10,000; treated as a capital asset by the partnership). Immediately before the distribution, Tom's basis in the partnership interest was $40,000. As a result:
A) Tom realizes and recognizes a loss of $9,000, and his basis is $0 in the accounts receivable and $1,000 in the land.
B) Tom realizes and recognizes a loss of $5,000, and his basis is $2,000 in the accounts receivable and $1,000 in the land.
C) Tom realizes and recognizes a loss of $0, and his basis is $0 in the accounts receivable and $1,000 in the land.
D) Tom realizes and recognizes a loss of $0, and his basis is $0 in the accounts receivable and $5,000 in the land.
E) None of the above
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!
