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AB Partnership has the following assets and liabilities at year end. The book basis and tax basis are the same amount. Machine: Basis $10,000 Value...

AB Partnership has the following assets and liabilities at year end. The book basis and tax basis are the same amount.


Machine: Basis $10,000 Value $13,000

Building:  Basis $80,000 Value $100,000

Note 1:    Basis $15,000 Value $15,000

Note 2:    Basis $90,000 Value $90,000


Note 1 is a nonrecourse note attached to the machine. Note 2 is a recourse note attached to the building. What is the amount of the partnership's minimum gain?


$2,000

$3,000

$5,000

$15,000

Top Answer

$15,000 get a partnership minimum gain (the excess if any of non recourse debt over the book value of... View the full answer

2 comments
  • minimum gain equals the difference between the nonrecourse debt principal and the book basis(not tax basis) of the property securing the debt)
    • Candy27
    • Apr 05, 2018 at 12:48am
  • Thank you
    • TaxStudent
    • Apr 05, 2018 at 12:55am

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