Julie, a one-third partner, retires from the JJM Partnership on January 1 of the current year. Her

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 Julie, a one-third partner, retires from the JJM Partnership on January 1 of the current year. Her basis in her partnership interest is $133,000 including her share of liabilities.

Julie receives $176,000 in cash from the partnership for her interest. On that date, the partnership balance sheet is as follows:

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Requirements

a.
What are the amount and character of Julie's recognized gain or loss?
b.
How would your answers to Part a change if Jenn and Mini each purchased one-half of Julie's

partnership interest for $88,000 cash instead of having the partnership distribute the $176,000

in cash to Julie?
Requirement a. What are the amount and character of Julie's recognized gain or loss?

Complete the table below to show Julie's recognized gain or loss.

 
 
 
Character of gain (loss)
Amount realized
 
 
Minus:
Adjusted basis
 
 
Recognized gain (loss)
 
 
Requirement b. How would your answers to Part a change if

Jenn and Mini each purchased one-half of Julie's partnership interest for $88,000 cash instead of having the partnership distribute the $176,000 in cash to Julie?

Complete the table below to show Julie's recognized gain or loss in this scenario.

 
 
 
Character of gain (loss)
Amount realized
 
 
Minus:
Adjusted basis
 
 
Recognized gain (loss)
 
 
 
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