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Take home problem 2 (also in the attachment) On 3...

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Take home problem 2 (also in the attachment) On 31 December 2010, Nicole sold her 20% interest in the T3 general partnership to Mabel and received a cash payment of $250,000 from the sale. The partnership=s trial balance immediately before the 12/31/2010 sale is shown below with market values included. Debit (Credit) Debit (Credit) Cost Basis Market Value Cash................................................. 50,000 50,000 Accounts receivable........................ 70,000 70,000 Inventory...................................... 60,000 260,000 Business furniture costing $90,000 shown net of $50,000 of accumulated depreciation............ 40,000 70,000 Capital assets.................................. 130,000 1,150,000 Loan due to Wells Fargo Bank...... (400,000) (400,000) George, Capital (80% interest)......... 80,000 (960,000) Nicole, Capital (20%)....... 20,000 (240,000) Ordinary income for 2010........... ( 50,000) N/A Trial balance totals............ -0- -0- REQUIRED: A. How much and what type of income and/or loss must Nicole report in 2010 from all transactions involving the partnership? B. What is Mabel?s basis in the partnership immediately after her purchase of Nicole partnership interest?

 

Paper#3133 | Written in 18-Jul-2015

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