Assignment Detail

Tutors

What will be James portion of the taxable income

    Assignment Instructions

    Assignment ID: FG133135381

    Question – Paul purchases from Wilbur Catterly a 30 percent partnership interest in the Yutes Partnership, paying Wilbur $90,000 and assuming $30,000 as Wilbur’s share of the partnership liabilities. The balance sheet of Yutes at the time of the purchase was as follows:

    Assets:

    Basis

    FMV

    Cash

    $60,000

    $60,000

    Accounts Receivable

    –0–

    30,000

    Inventory

    40,000

    60,000

    Land

    50,000

    70,000

    $300,000

    $400,000

    Liabilities & Capital:

    Liabilities

    $100,000

    $100,000

    James, Capital

    140,000

    210,000

    Wilbur, Capital

    60,000

    90,000

    $300,000

    $400,000

    There is no basis election in effect for the partnership. Show your work.

    Upon the collection of the receivables and the sale of the inventory, both at their fair market value as shown above, what will be Paul’s portion of the taxable income from these two items?

    Assume that the partnership has made an election under Code Sec. 754. Upon the collection of the receivables and the sale of the inventory, what will be Paul’s portion of the taxable income from the two items? What will be his special adjustment? Character of the income from the sale of the two items?

    Assume the same facts as in (b). What will be James’s portion of the taxable income from the two items? Will the special adjustment have any effect on James?

    Need fresh solution to this Assignment without plagiarism?? Get Quote Now

    Expert Answer

    Asked by: Anonymous
    Plagiarism Checked
    Answer Rating:
    4.6/5

    Plagiarism free Answer files are strictly restricted for download to the student who originally posted this question.

    Related Assignments

    //
    Our customer support team is here to answer your questions. You can send Assignments directly to support team.
    👋 Hi, how can I help?