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safezone safezone
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7 years ago
The CHS Partnership's balance sheet presented below is prepared on a cash basis at September 30 of the current year.

Assets   Basis   Fair Market Value
Cash
Accounts receivable
Land (capital asset)
Total   $12,000 
-0-
63,000
$75,000     $ 12,000   
48,000
90,000
$150,000   

Equities   Basis   Fair Market Value
Notes payable
Cindy, Capital
Helen, Capital
Sally, Capital
Total   $30,000   
15,000
15,000
15,000
$75,000     $ 30,000   
40,000
40,000
40,000
$150,000   

Cindy withdraws from the partnership under an agreement whereby she takes one-third of each of the three assets and assumes $10,000 of the notes payable. Her basis for the partnership interest before any distribution is $25,000. What gain/loss should she report for tax purposes?
Textbook 
Prentice Hall's Federal Taxation 2014 Corporations, Partnerships, Estates & Trusts

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


Edition: 27th
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strwbrrystrwbrry
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7 years ago
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Every man, wherever he goes, is encompassed by a cloud of comforting convictions, which move with him like flies on a summer day.
   --Bertrand Russell, 1950

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