Good Times is a general partnership with the following balance sheets: ...
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Accounting
Good Times is a general partnership with the following balance sheets:
| Basis | FMV | |
| Cash | $15,000 | $15,000 |
| Capital assets | 35,000 | 75,000 |
| Land | 85,000 | 240,000 |
| Totals | $135,000 | $330,000 |
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| Recourse liabilities | $90,000 | $90,000 |
| Capital, Claire | 15,000 | 80,000 |
| Capital, Lorie | 15,000 | 80,000 |
| Capital, Tom | 15,000 | 80,000 |
| Totals | $135,000 | $330,000 |
The partners share equally in profits, losses and capital. Tom is negotiating to sell his interest in the partnership to an unrelated buyer. Assume the buyer is willing to pay $120,000 cash for half Toms interest.
- What will be the amount realized by Tom on the sale?
- What is the tax basis of the interest to be sold by Tom?
- How much gain will Tom recognize on the sale?
- What will be the buyers tax basis in the newly acquired interest?
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