Ask Question
16 April, 13:28

Jessica is a 25% partner in the JRL Partnership. On January 1, JRL distributes $40,000 cash to Jessica. JRL has no hot assets or liabilities at the date of the distribution. Jessica's basis in her JRL partnership interest is $28,000. What is the amount and character of Jessica's gain or loss from the distribution?

+3
Answers (1)
  1. 16 April, 16:24
    0
    Answer: $12,000

    Explanation:

    Given that,

    Jessica is a 25% partner in the JRL Partnership

    Cash received = $40,000

    Jessica's partnership interest (basis) = $28,000

    JRL has no hot assets or liabilities

    Capital Gain on Distribution = Total Amount Received - Basis in Firm + Liability in Partnership

    = $40,000 - $28,000 + $0

    = $12,000

    Therefore, $12,000 is the amount and character of Jessica's gain from the distribution.
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “Jessica is a 25% partner in the JRL Partnership. On January 1, JRL distributes $40,000 cash to Jessica. JRL has no hot assets or ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers