The KLM Partnership owns the following assets on march 1 of the current year: ...
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Accounting
The KLM Partnership owns the following assets on march 1 of the current year:
Asset
Partnerships Basis
FMV
Cash
$30000
$30000
Receivables
0
16000
Inventory
50000
52,000
Supplies
6000
6500
Equipment (Depreciation of $4000)
9000
10500
Land (Investment)
40000
65000
Total
$135000
$180000
Which partnership items are unrealized receivables?
Is the partnerships inventory substantially appreciated?
Assume the KLM Partnership has no liabilities and that Kays basis for her partnerships interest is $33,750. On March 1 of the current year, Kay receives a $20,000 current distribution in cash, which reduces her partnership interest from one-third to one-fourth. What are the tax results of the distribution (ie , the amount and character of any gain, loss, or income recognized and Kays basis in her partnership interest)?
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