Chapter 21 Dispositions of Partnership Interests and Partnership Distributions
1. [LO 1] Joey is a 25% proprietor of Crazy LLC. He now not needs to be concerned within the enterprise. What choices does Joey need to exit the busines? 2. [LO 1] Evaluate and distinction the mixture and entity approaches for a sale of a partnership curiosity. three. [LO 1] What restrictions may stop a associate from promoting his partnership curiosity to a 3rd celebration? four. [LO 1] Clarify how a partner’s debt aid impacts his quantity realized in a sale of partnership curiosity. 5. [LO 1] Below what circumstances will the achieve or loss on the sale of a partnership curiosity be characterised as odd relatively than capital? 6. [LO 1] What are “sizzling assets” and why are they essential within the sale of a partnership curiosity? 7. [LO 1] For an accrual-method partnership, are accounts receivable thought-about unrealized receivables? Clarify. eight. [LO 1] Can a partnership have unrealized receivables if it has no accounts receivable? 9. [LO 1] How do sizzling belongings have an effect on the character of achieve or loss on the sale of a partnership curiosity? 10. [LO 1] Below what circumstances can a associate acknowledge each achieve and loss on the sale of a partnership curiosity? 11. [LO 1] Absent any particular elections, what impact does a sale of partnership curiosity have on the partnership? 12. [LO 1] Analysis Usually, a promoting partner’s capital account carries over to the purchaser of the partnership curiosity. Below what circumstances will this not be the case? 13. [LO 2] What distinguishes working from liquidating distributions? 14. [LO 3] Below what circumstances will a associate acknowledge a achieve from an working distribution? 15. [LO 3] Below what circumstances will a associate acknowledge a loss from an working distribution? 16. [LO 3] Usually, what impact does an working distribution have on the partnership? 17. [LO 3] If a partner’s exterior foundation is lower than the partnership’s inside foundation in distributed belongings, how does the associate decide his foundation of the distributed belongings in an working distribution? 18. [LO 4] Below what circumstances will a associate acknowledge achieve in a liquidating distribution? 19. [LO 4] Below what circumstances will a associate acknowledge loss in a liquidating distribution? 20. [LO 4] Describe how a associate determines his foundation in distributed belongings in circumstances through which a partnership distributes solely cash, stock, and/or unrealized receivables in a liquidating distribution. 21. [LO 4] How does a associate decide his foundation in distributed belongings when the partnership distributes different property as well as to cash and sizzling belongings? 22. [LO 5] Planning SBT partnership distributes $5,000 money and a parcel of land with a good market worth of $40,000 and a $25,000 foundation to the partnership to Sam (30% associate). What elements should Sam and SBT take into account in figuring out the tax remedy of this distribution? 23. [LO 5] Focus on the underlying concern to tax coverage makers in distributions through which a associate receives kind of than his share of the partnership sizzling belongings. 24. [LO 5] Usually, how do the disproportionate distribution guidelines be certain that companions acknowledge their share of partnership odd revenue? 25. [LO 6] Planning Why would a new associate who pays extra for a partnership curiosity than the promoting partner’s exterior foundation need the partnership to elect a particular foundation adjustment? 26. [LO 6] Checklist two frequent conditions that can trigger a partner’s inside and out of doors foundation to vary. 27. [LO 6] Clarify why a partnership may not wish to make a §754 election to permit particular foundation changes. 28. [LO 6] When may a brand new associate have an upward foundation adjustment following the acquisition of a partnership curiosity? 29. [LO 6] Are particular foundation changes obligatory? If that's the case, when? Issues 30. [LO 1] Jerry is a 30% associate within the JJM Partnership when he sells his total curiosity to Lucia for $56,000 money. On the time of the sale, Jerry’s foundation in JJM is $32,000. JJM doesn't have any debt or sizzling belongings. What is Jerry’s achieve or loss on the sale of his curiosity? 31. [LO 1] Pleasure is a 30% associate within the JOM Partnership when she sells her total curiosity to Hope for $72,000 money. On the time of the sale, Joy’s foundation in JOM is $44,000 (which incorporates her $6,000 share of JOM liabilities). JOM doesn't have any sizzling belongings. What's Joy’s achieve or loss on the sale of her curiosity?