The Olive Partnership makes a proportionate distribution of its assets to Jerry, in complete liquidation...
70.2K
Verified Solution
Link Copied!
Question
Accounting
The Olive Partnership makes a proportionate distribution of its assets to Jerry, in complete liquidation of his partnership interest. The distribution consists of $40,000 in cash and capital assets with a basis to the partnership of $150,000 and a fair market value of $160,000. None of the payment is for partnership goodwill. At the time of the distribution, Jerry's partnership basis is $150,000 and the partnership has no liabilities and no hot assets. If the partnership makes an optional basis adjustment election on a timely filed return, it recognizes: pls including calculation process
a. Capital gain of $40,000 and increases the basis of its remaining assets by $40,000.
b. Capital loss of $40,000 and decreases the basis of its remaining assets by $40,000.
c. No gain or loss and increases the basis of its remaining assets by $40,000.
d. No gain or loss and decreases the basis of its remaining assets by $40,000.
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!
