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Hannah, a partner in the cash basis HBA Partnershi...

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Hannah, a partner in the cash basis HBA Partnership, has a one-third interest in partnership profits and losses. The partnership?s balance sheet at the end of the current year is as follows: Basis FMV Basis FMV Cash $60,000 $60,000 Hannah, capital $60,000 $200,000 Receivables 0 300,000 Brittney, capital 60,000 200,000 Land 120,000 240,000 Alexis, capital 60,000 200,000 Total $180,000 $600,000 Total $180,000 $600,000 Hannah sells her investment in the HBA Partnership to Richard at the end of the current year for cash of $200,000. a. How much income must Hannah report on her tax return for the current year from the sale, and what is its nature? b. If the partnership does not make an optional adjustment to basis election, what are the type and amount of income that Richard must report in the next year when the receivables are collected? c. If the partnership did make an optional adjustment to basis election, what are the type and amount of income that Richard must report in the next year when the receivables are collected? When the land (which is used in the HBA Partnership?s business) is sold for $300,000? Assume no other transactions occurred that year. I attached a better version of the assignment in pdf

 

Paper#1476 | Written in 18-Jul-2015

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