The CB Partnership has two partners, Carole & Beth. Both Carole and Beth have a

Question

The CB Partnership has two partners, Carole & Beth. Both Carole and Beth have a basis in the partnership of $30,000 immediately before any distribution. The partnership distributes $33,000 cash to Carole and $25,000 cash to Beth. a. Calculate Carole & Beth's recognized gain/loss & basis after the transfer assuming the distribution is a current distribution. b. Calculate Carole & Beth's recognized gain/loss & basis after the transfer assuming the distribution is a liquidating distribution.

Explanation / Answer

1 Case Scenario- Current Distribution Particulars Partner-Carole Partner-Beth Basis Values            30,000.00        30,000.00 Distribution            33,000.00        25,000.00 Gain/Loss -            3,000.00          5,000.00 2 Case Scenario- Liquidating Distribution Particulars Partner-Carole Partner-Beth Basis Values            30,000.00        30,000.00 Distribution(Distribution will be equal since the capital ratio is equal which will be (33000+25000)/2)            29,000.00        29,000.00 Loss              1,000.00          1,000.00

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.