90.2K

Verified Solution

Link Copied!

The operating expenses include a $1,800 trucking fine that one of its drivers incurred for reckless driving and speeding and meals expense of $6,000 (the meals were not provided by a restaurant). By the end of 2022, Reed has had a falling out with Carrie and Doug and has decided to leave the partnership. He has located a potential buyer for his partnership interest, Indie Ruff. Indie has agreed to purchase Reed's interest in Slicenhook for $730,000 in cash and the assumption of Reed's share of Slicenhook's debt. Carrie and Doug, however, are not certain that admitting Indie to the partnership is such a good idea. They want to consider having Slicenhook liquidate Reed's interest on January 1, 2023. As of January 1, 2023, Slicenhook has the following assets: Cash Investment-tax exempts Investment stock Equipment-net of depreciation Building-net of depreciation Land Total Tax Basis $ 876,800 15,000 45,000 333,000 1,146,000 460,000 $ 2,875,800 FMV $ 876,800 18,000 45,000 600,000 1,440,000 510,000 $ 3, 489,800 Carrie and Doug propose that Slicenhook distribute the following to Reed in complete liquidation of his partnership interest: Cash Investment stock Equipment-$200,000 cost, net of depreciation Total Tax Basis $ 485,000 45,000 111,000 $ 641,000 FMV $ 485,000 45,000 200,000 $ 730,000 i-1. If Slicenhook distributes the assets proposed by Carrie and Doug in complete liquidation of Reed's partnership interest, what are the amount and character of Reed's recognized gain or loss? i-2. If Slicenhook distributes the assets proposed by Carrie and Doug in complete liquidation of Reed's partnership interest, what is Reed's basis in the distributed assets? Answer is not complete. Complete this question by entering your answers in the tabs below. Req 11 Req 12 If Slicenhook distributes the assets proposed by Carrie and Doug in complete liquidation of Reed's partnership interest, what are the amount and character of Reed's recognized gain or loss? O$102,100 ordinary income and $89,000 capital gains O$102,400 ordinary income and $90,000 capital loss $162,400 capital loss and $89,000 ordinary income $89,000 ordinary income and $102,400 capital gains Neither gain nor loss recognized i-1. If Slicenhook distributes the assets proposed by Carrie and Doug in complete liquidation of Reed's partnership interest, what are the amount and character of Reed's recognized gain or loss? i-2. If Slicenhook distributes the assets proposed by Carrie and Doug in complete liquidation of Reed's partnership interest, what is Reed's basis in the distributed assets? Complete this question by entering your answers in the tabs below. Req 11 Req 12 If Slicenhook distributes the assets proposed by Carrie and Doug in complete liquidation of Reed's partnership interest, what is Reed's basis in the distributed assets? (Do not round intermediate calculations. Round your final answers to the nearest whole dollar amount.) Basis 485,000 $ Cash Investment in stock Equipment The operating expenses include a $1,800 trucking fine that one of its drivers incurred for reckless driving and speeding and meals expense of $6,000 (the meals were not provided by a restaurant). By the end of 2022, Reed has had a falling out with Carrie and Doug and has decided to leave the partnership. He has located a potential buyer for his partnership interest, Indie Ruff. Indie has agreed to purchase Reed's interest in Slicenhook for $730,000 in cash and the assumption of Reed's share of Slicenhook's debt. Carrie and Doug, however, are not certain that admitting Indie to the partnership is such a good idea. They want to consider having Slicenhook liquidate Reed's interest on January 1, 2023. As of January 1, 2023, Slicenhook has the following assets: Cash Investment-tax exempts Investment stock Equipment-net of depreciation Building-net of depreciation Land Total Tax Basis $ 876,800 15,000 45,000 333,000 1,146,000 460,000 $ 2,875,800 FMV $ 876,800 18,000 45,000 600,000 1,440,000 510,000 $ 3, 489,800 Carrie and Doug propose that Slicenhook distribute the following to Reed in complete liquidation of his partnership interest: Cash Investment stock Equipment-$200,000 cost, net of depreciation Total Tax Basis $ 485,000 45,000 111,000 $ 641,000 FMV $ 485,000 45,000 200,000 $ 730,000 i-1. If Slicenhook distributes the assets proposed by Carrie and Doug in complete liquidation of Reed's partnership interest, what are the amount and character of Reed's recognized gain or loss? i-2. If Slicenhook distributes the assets proposed by Carrie and Doug in complete liquidation of Reed's partnership interest, what is Reed's basis in the distributed assets? Answer is not complete. Complete this question by entering your answers in the tabs below. Req 11 Req 12 If Slicenhook distributes the assets proposed by Carrie and Doug in complete liquidation of Reed's partnership interest, what are the amount and character of Reed's recognized gain or loss? O$102,100 ordinary income and $89,000 capital gains O$102,400 ordinary income and $90,000 capital loss $162,400 capital loss and $89,000 ordinary income $89,000 ordinary income and $102,400 capital gains Neither gain nor loss recognized i-1. If Slicenhook distributes the assets proposed by Carrie and Doug in complete liquidation of Reed's partnership interest, what are the amount and character of Reed's recognized gain or loss? i-2. If Slicenhook distributes the assets proposed by Carrie and Doug in complete liquidation of Reed's partnership interest, what is Reed's basis in the distributed assets? Complete this question by entering your answers in the tabs below. Req 11 Req 12 If Slicenhook distributes the assets proposed by Carrie and Doug in complete liquidation of Reed's partnership interest, what is Reed's basis in the distributed assets? (Do not round intermediate calculations. Round your final answers to the nearest whole dollar amount.) Basis 485,000 $ Cash Investment in stock Equipment

Answer & Explanation Solved by verified expert

See Answer