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The STUV Partnership owns the following assets on December 30 of the current? year: ...

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Question

Accounting

The STUV Partnership owns the following assets on December 30 of the current? year:

Assets

Partnership's Basis

FMV

Cash

$70,000

$70,000

Receivables

0

36,000

Inventory

112,000

160,000

Total

$182,000

$266,000

The partnership has no? liabilities, and each? partner's basis in his or her partnership interest is $15,000.On December 30 of the current? year,Sally receives a current distribution of inventory having a $16,625 ?FMV, which reduces her partnership interest from? one-fourth to? one-fifth.

Requirement

What are the tax consequences of the distribution to the? partnership,Sally?,and the other? partners?

Beginning

Interest Before

Interest After

Hypothetical

Partnership

Distribution

Distribution

Proportionate

Actual

Amount

(1/4)

(1/5)

Distribution

Distribution

Difference

Sec. 751 assets:

Total Sec. 751 assets

Non-Sec. 751 assets:

Total non-Sec. 751 assets

Answer & Explanation Solved by verified expert
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