Partner cannot recognize a loss on the distribution

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Supply Chain Management: A Logistics Perspective
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Chapter 5 / Exercise 3
Supply Chain Management: A Logistics Perspective
Coyle/Langley
Expert Verified
partner cannot recognize a loss on the distribution because the desk is a § 1231 asset (depreciable property used in a trade or business). Only cash, inventory and receivables can be distributed if the partner is to recognize a loss. Therefore, the desk must take a substituted basis of $22,000 to the partner, which is the amount of the partner’s remaining outside basis when the desk is distributed.
PTS: 1 REF: Example 59
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Supply Chain Management: A Logistics Perspective
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Chapter 5 / Exercise 3
Supply Chain Management: A Logistics Perspective
Coyle/Langley
Expert Verified
21-26 2008 Comprehensive Volume/Test Bank 27. Bill received $15,000 cash and a capital asset with a basis and fair market value of $35,000 in a proportionate liquidating distribution. His basis in his partnership interest was $65,000 prior to the distribution. How much gain or loss does Bill recognize, and what is his basis in the capital asset received in the distribution?
PTS: 1 REF: Example 56 28. Which of the following statements, if any, about an LLC is false?
PTS: 1 REF: p. 21-47 | p. 21-48
Partnerships 21-27 MATCHING Match each of the following statements with the terms below that provide the best definition. a. Organizational choice of many large accounting firms. b. Partner’s percentage allocation of current operating results. c. Might affect any two partners’ tax liabilities in different ways. d. Brokerage and registration fees incurred for promoting and marketing partnership interests. e. Transfer of asset to partnership followed by immediate distribution of cash to partner. f. Must have at least one general partner. g. Theory treating the partner and partnership as separate economic units. h. Partner’s basis in partnership interest after tax-free contribution of asset to partnership. i. Partnership’s basis in asset after tax-free contribution of asset to partnership. j. Owners are “members.” k. Theory treating the partnership as a collection of taxpayers joined in an agency relationship. l. Allows many unincorporated entities to select their Federal tax status. m. No correct match provided. 1. Limited partnership 2. Check the box regulations 3. Profits interest 4. Limited liability partnership 5. Aggregate concept 6. Substituted 7. Limited liability company 8. Qualified nonrecourse debt 9. Syndication costs 10. Disguised sale 11. Separately stated item 12. Carryover 13. Entity concept 1. ANS: F 2. ANS: L

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