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Mandarini Mandarini
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7 years ago
On December 31, Kate receives a $28,000 liquidating distribution from the KLM Partnership. On that date, Kate's basis in her limited partnership interest is $18,000 (which, of course, includes her share of partnership liabilities). The other partners assume her $6,000 share of liabilities. Just prior to the distribution, the partnership has the following balance sheet. Kate is leaving the partnership but the partnership is continuing.

Assets   Basis   Fair Market Value
Cash
Accounts receivable
Inventory
Land
Total   $30,000 
-0-
15,000
45,000
$90,000     $ 30,000   
20,000
25,000
90,000
$165,000   

Equities   Basis   Fair Market Value
Notes payable
Kate, capital
Lynn, capital
Mark, capital
Total   $30,000   
12,000
24,000
24,000
$90,000     $ 30,000   
27,000
54,000
54,000
$165,000   

What is the amount and character of the gain that Kate must recognize on the liquidating distribution?
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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RimounRimoun
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7 years ago
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Mandarini Author
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6 years ago
Wow you guys are great!!!!!!!!!!!!!!

always correct
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