Problem 13-54 (LO. 6) Gail and Harry own the GH Partnership, which has conducted business...
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Problem 13-54 (LO. 6) Gail and Harry own the GH Partnership, which has conducted business for 10 years. The bases for their partnership interests are $100,000 for Gail and $150,000 for Harry. GH Partnership holds the following assets: Basis $10,000 30,000 25,000 100,000 250,000 Fair Market Value Asset Cash Accounts receivable Inventory Building Land $10,000 28,000 26,000 150,000 400,000 The straight-line method has been used to depreciate the building. The accumulated depreciation is $70,000 Gail and Harry sell their partnership interests to Keith and Liang for $307,000 eaclh a. Gail's recognized gain is , which is classified as Harry's recognized gain is , which is classified as b. From a tax perspective, would it matter to Keith and Liang whether they purchase Gail's and Harry's partnership interests or the partnership assets from GH Partnership? If the assets are appreciated, an individual purchasing an interest in a partnership normally would prefer to purchase This preference occurs because the basis of the assets will be equal to to Keith and Liang which method is used because the GH Partnership is terminated. The assets of the new partnership will have a basis equal to In this case, it matter
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