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Mandarini Mandarini
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7 years ago
The LM Partnership terminates for tax purposes on July 15 when Latasha sells her 60% capital and profits interest to Zoe for $100,000. The partnership has no liabilities, and its assets at the time of termination are as follows:

Assets   Basis   FMV
Cash   $ 20,000   $ 20,000
Receivables   10,000   12,000
Inventory   22,000   28,000
Building   80,000   85,000
Land   30,000   21,667
Total   $162,000   $166,667

Marika, a 40% partner in the LM Partnership, has a $64,800 basis in her partnership interest (outside basis) at the time of the termination. She has held her LM Partnership interest for three years at the time of the termination. The bases of Marika and Zoe in the new LM Partnership is:
   Marika   Zoe
A)
Marika   Zoe
$64,800   $  97,200

B)
Marika   Zoe
$66,667   $100,000

C)
Marika   Zoe
$64,800   $100,000

D)
Marika   Zoe
$66,667   $  97,200
Textbook 
Prentice Hall's Federal Taxation 2014 Corporations, Partnerships, Estates & Trusts

Prentice Hall's Federal Taxation 2014 Corporations, Partnerships, Estates & Trusts


Edition: 27th
Authors:
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genflynngenflynn
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7 years ago
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We have the most crude accounting tools. It's tragic because our accounts and our national arithmetic doesn't tell us the things that we need to know.

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6 years ago
Definitely recommend this tutor and website!

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