The Olive Partnership makes a proportionate distribution of its assets to Jerry, in complete liquidation of his partnership interest. The distribution consists of $40,000 in cash and capital assets with a basis to the partnership of $150,000 and a fair market value of $160,000. None of the payment is for partnership goodwill. At the time of the distribution, Jerry's partnership basis is $150,000 and the partnership has no liabilities and no “hot assets.” If the partnership makes an optional basis adjustment election on a timely filed return, it recognizes: pls including calculation process
a. Capital gain of $40,000 and increases the basis of its remaining assets by $40,000.
b. Capital loss of $40,000 and decreases the basis of its remaining assets by $40,000.
c. No gain or loss and increases the basis of its remaining assets by $40,000.
d. No gain or loss and decreases the basis of its remaining assets by $40,000.
e. None of the above.
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Status NEW
Posted 10 Dec 2017 11:12 PM
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The----------- Ol-----------ive----------- Pa-----------rtn-----------ers-----------hip-----------
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file 1512949347-The Olive Partnership.docx preview (285 words )
T-----------he -----------Oli-----------ve -----------Par-----------tne-----------rsh-----------ip ----------- Th-----------e O-----------liv-----------e P-----------art-----------ner-----------shi-----------p m-----------ake-----------s a----------- pr-----------opo-----------rti-----------ona-----------te -----------dis-----------tri-----------but-----------ion----------- of----------- it-----------s a-----------sse-----------ts -----------to -----------Jer-----------ry,----------- in----------- co-----------mpl-----------ete----------- li-----------qui-----------dat-----------ion----------- of----------- hi-----------s p-----------art-----------ner-----------shi-----------p i-----------nte-----------res-----------t. -----------The----------- di-----------str-----------ibu-----------tio-----------n c-----------ons-----------ist-----------s o-----------f $-----------40,-----------000----------- in----------- ca-----------sh -----------and----------- ca-----------pit-----------al -----------ass-----------ets----------- wi-----------th -----------a b-----------asi-----------s t-----------o t-----------he -----------par-----------tne-----------rsh-----------ip -----------of -----------$15-----------0,0-----------00 -----------and----------- a -----------fai-----------r m-----------ark-----------et -----------val-----------ue -----------of -----------$16-----------0,0-----------00.----------- No-----------ne -----------of -----------the----------- pa-----------yme-----------nt -----------is -----------for----------- pa-----------rtn-----------ers-----------hip----------- go-----------odw-----------ill-----------. A-----------t t-----------he -----------tim-----------e o-----------f t-----------he -----------dis-----------tri-----------but-----------ion-----------, J-----------err-----------y's----------- pa-----------rtn-----------ers-----------hip----------- ba-----------sis----------- is----------- $1-----------50,-----------000----------- an-----------d t-----------he
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