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##### Three Multiple Choice Accounting Questions

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Question;Chuck has an outside basis of \$190,000 in the Forest Partnership as of December 31 of the current year. On that date the partnership liquidates and distributes to Chuck a proportionate distribution of \$140,000 cash and inventory with an inside basis to the partnership of \$10,000 and a fair market value of \$30,000. In addition, Chuck receives a desk which has an inside basis and fair market value of \$3,400 and \$4,600, respectively. None of the distribution is for partnership goodwill. How much gain or loss will Chuck recognize on the distribution, and what basis will he take in the desk? A.\$36,600 loss, \$3,400 basis. B. \$35,400 loss, \$4,600 basis. C. \$15,400 loss, \$4,600 basis. D. \$0 loss, \$40,000 basis.Harper is a partner in a continuing partnership. At the end of the current year, the partnership distributed to Harper in a proportionate, nonliquidating distribution cash of \$50,000, inventory with a basis to the partnership of \$45,000 and a fair market value of \$80,000, and a parcel of land with a basis to the partnership of \$130,000 and a fair market value of \$90,000. Harper?s basis in the partnership interest was \$260,000 before the distribution. What basis does Harper take in the inventory and land, and what is his basis in the partnership interest following the distribution? A. \$45,000 basis in inventory, \$90,000 basis in land, \$75,000 basis in partnership. B. \$45,000 basis in inventory, \$130,000 basis in land, \$35,000 basis in partnership. C. \$80,000 basis in inventory, \$90,000 basis in land, \$40,000 basis in partnership. D. \$80,000 basis in inventory, \$130,000 basis in land, \$20,000 basis in partnership.Kenneth receives a proportionate, nonliquidating distribution from the Fern Partnership. The distribution consists of \$10,000 cash and property with an adjusted basis to the partnership of \$40,000 and a fair market value of \$58,000. Immediately before the distribution, Kenneth's adjusted basis for his partnership interest is \$75,000. Kenneth?s basis in the noncash property received is:A. \$25,000 B. \$40,000 C. \$58,000 D. \$65,000

Paper#42393 | Written in 18-Jul-2015

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