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On March$1,2021,$ Brent Hall$,$ Rocco Hall$,$ and Ryuu Jindal form a partnership to provide accounting and tax services. The partners each contribute $ $170$ comma $000$ and agree that all income and losses are to be shared equally. The fiscal period of the partnership ends on December $31.$

For the fiscal period March$1,2021,$ to December$31,2023,$ the following information is$$ available:

Information

$1.$

The partnership earned business income of $ $138$ comma $000$ for income tax purposes.

$2.$

The partnership realized a capital gain of $ $39$ comma $000.$

$3.$

The partnership made charitable donations of $ $8$ comma $700$ during this period. Donations are allocated equally to the three partners.

$4.$

During this$$ period, Ryuu Jindal made total withdrawals from the partnership of $ $32$ comma $000.$

$5.$

Additional capital was required to expand the operations of the office$$ and, as a$$ consequence, each partner contributed an additional $ $41$ comma $000$ in cash.

Ryuu Jindal decided to withdraw from the partnership effective January$1,2024.$ After some$$ negotiations, each of the other two partners agreed to pay him $ $134$ comma $000$ in cash for$$ one$-$half of his interest in the$$ partnership, a total of $ $268$ comma $000.$ Brent$\text{'}$s payments are made on February$1,2024,$ and Rocco pays one month later on March$1,2024.$ The partnership has business income of $ $15$ comma $000$ in both January and February $2024,$ none of which is allocated to Ryuu since he was no longer a partner at that time.

Ryuu Jindal incurred legal and accounting fees of $ $1$ comma $900$ with respect to the disposition of his partnership interest.

Requirement A$.$ Calculate the ACB of Ryuu Jindal's partnership interest on January$1,2024.$

Initial Capital Contribution

Additional Capital Contribution

Total Capital Contributions

Drawings

Income Allocations:

Business Income

Capital Gains

Charitable Donations

ACB on January $1,2024$

Part $2$

Requirement B$.$ Determine the income tax consequences to Ryuu Jindal for the sale of his partnership interest. Explain how this$$ amount, and any other amounts related to the$$ partnership, will be taxed to him in $2024.$

POD

ACB:

From Preceding Calculation

Legal and Accounting Fees

Total ACB

Capital Gain

Inclusion Rate

$1-$: $2$

Taxable Capital Gain

Part $3$

Requirement C$.$ Indicate how the ACB of each$$ partner's interest will be affected by the withdrawal of Ryuu Jindal from the partnership.

A$.$

The ACB of Brent and Rocco would each increase by $ $268$ comma $000,$ which is the entire value of Ryuu$\text{'}$s partnership interest.

B$.$

The ACB of Brent and Rocco would each increase by $ $67$ comma $000,$ which is half of the amount that they paid to Ryuu for$$ one$-$half of his partnership interest.

C$.$

The ACB of Brent and Rocco would each increase by $ $134$ comma $000,$ which is the amount that they paid to Ryuu for$$ one$-$half of his partnership interest.

D$.$

The ACB of Brent and Rocco would each decrease by $ $134$ comma $000,$ which is the amount that they paid to Ryuu for$$ one$-$half of his partnership interest.

Indicate how the ACB of each partner's interest will be affected by the withdrawal of Ryuu Jindal from the partnership.

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