ACCT 730 - Week 5

ACCT 730 - Week 5 - ACCT 730 PROBLE M SET #5 Problems 15,...

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ACCT 730 PROBLE M SET #5 Problems 15, 21, 27, and 33 11-#15: Potential tax consequences should be called to the attention of all parties involved: - Gain/loss resulting from a sale of a partnership interest maybe divided into capital gain/loss and ordinary income/loss - In computing the amount realized and the adjusted basis of the interest sold, Tim's partner's share of partnership liabilities must be determined. - Una includes any assumed indebtedness as a part of the consideration paid for the partnership interest. - Income for the partnership interest for the tax year is allocated between Time and Una and the partnership's tax year "closes" with respect to Tim It causes Tim to report the share of income on the date of sale rather than at the end of the partnership's tax year. - Tim's basis is adjusted for the allocated income or loss before he calculates the gain or loss on the sale of the interest. - The partnership is not required to issue a Schedule K-1 to Tim until the normal filing of its
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This note was uploaded on 04/07/2011 for the course ACCT 640 taught by Professor N/a during the Spring '11 term at Davenport.

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ACCT 730 - Week 5 - ACCT 730 PROBLE M SET #5 Problems 15,...

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