Answer Happy

3. Ken owns a one-third interest in the KLM Partnership, which develops real estate . The partnership both constructs real estate for sale to customers and holds real estate for rental purposes. (a) KLM uses the cash method of accounting. The bases and values of the partnership assets and partners' interests are as follows:
LAPTER & SALES OF PARTNERSHIP INTERESTS BY PARTNERS Adjusted Adjusted Basis F.M.V. Basis F.M.V. $ 45,000 $ 45,000 K $110,000 $180,000 L $110,000 $180,000 $ 0 $ 60,000 M $110,000 $180,000 Aseet Cash Accounts $150,000 $180,000 Receivable Store Building (for sale) Office Building (for rent) Goodwill, etc. Asset $135,000 $240,000 $0 $ 15,000 $330,000 $540,000 $330,000 $540,000 What are the tax consequences to Ken if, on January 1st, Ken sells his partnership interest to Niki for $180,000 in cash? (b) KLM uses the cash method of accounting. The bases and values of the partnership assets and partners' interests are as follows: Adjusted Adjusted Basis F.M.V. Basis F.M.V. Cash $ 45,000 $ 45,000 K $190,000 $180,000 Accounts L $190,000 $180,000 Receivable $ 0 $ 60,000 M $190,000 $180,000 Store Building (for sale) $150,000 $180,000 Office Building (for rent) $375,000 $240,000 Goodwill, etc. $ 0 $ 15.000 $570,000 $540,000 $570,000 $540,000 What are the tax consequences to Ken if, on January 1st, Ken sells his partnership interest Niki for $180,000 in cash? (C) KLM use the accrual method of accounting. The assets and partners' capital accounts of the KLM Partnership are as follows: Adjusted Capital Adjusted Asset Basis F.M.V. Accounts Basis F.M.V. Cash $ 45,000 $ 45,000 K $130,000 $180,000 Accounts L $130,000 $180.000 Receivable $ 60,000 $ 60,000 M $130,000 $180,000 $150,000 $180,000 Store Building for sale) Office Building (for rent) Goodwill, etc. $135,000 $ 0 $390,000 $240,000 $ 15.000 $540,000 $390,000 $540,000
366 TAXATION OF PARTNERS AND PARTNERSHIPS PARTI What are the tax consequences to Ken if on January 1st, Ken sells his partnership interest to Niki for $180,000 in cash?