The CHS Partnership's balance sheet presented below is prepared on a cash basis at September 30 of the current year.
$$\begin{array} { | l | r | c | }
\hline { \text { Equities } } & \text { Basis } & \text { Fair Market Value } \
\hline \text { Notes payable } & \$ 30,000 & \$ 30,000 \
\text { Cindy, Capital } & 15,000 & 40,000 \
\text { Helen, Capital } & 15,000 & 40,000 \
\text { Gally, Capital } & \underline { 15,000 } & \underline { 40,000 } \
\text { Total } & \underline { \$ 75,000 } & \underline { \$ 150,000 } \
\hline
\end{array}$$ Cindy withdraws from the partnership under an agreement whereby she takes one- third of each of the three assets and assumes $10,000 of the notes payable. Her basis for the partnership interest before any distribution is
$25,000. What gain/loss should she report for tax purposes?

Question

The CHS Partnership's balance sheet presented below is prepared on a cash basis at September 30 of the current year.
 $$\begin{array} { | l | r | c | } 
\hline  { \text { Equities } } & \text { Basis } & \text { Fair Market Value } \
\hline \text { Notes payable } & \$ 30,000 & \$ 30,000 \
\text { Cindy, Capital } & 15,000 & 40,000 \
\text { Helen, Capital } & 15,000 & 40,000 \
\text { Gally, Capital } & \underline { 15,000 } & \underline { 40,000 } \
\text { Total } & \underline { \$ 75,000 } & \underline { \$ 150,000 } \
\hline
\end{array}$$ Cindy withdraws from the partnership under an agreement whereby she takes one- third of each of the three assets and assumes $10,000 of the notes payable. Her basis for the partnership interest before any distribution is
$25,000. What gain/loss should she report for tax purposes?

Quizplus · Accepted Answer

The Answer of The CHS Partnership's balance sheet presented below is prepared on a cash basis at September 30 of the current year.
 $$\begin{array} { | l | r | c | } 
\hline  { \text { Equities } } & \text { Basis } & \text { Fair Market Value } \
\hline \text { Notes payable } & \$ 30,000 & \$ 30,000 \
\text { Cindy, Capital } & 15,000 & 40,000 \
\text { Helen, Capital } & 15,000 & 40,000 \
\text { Gally, Capital } & \underline { 15,000 } & \underline { 40,000 } \
\text { Total } & \underline { \$ 75,000 } & \underline { \$ 150,000 } \
\hline
\end{array}$$ Cindy withdraws from the partnership under an agreement whereby she takes one- third of each of the three assets and assumes $10,000 of the notes payable. Her basis for the partnership interest before any distribution is
$25,000. What gain/loss should she report for tax purposes?

The CHS Partnership's Balance Sheet Presented Below Is Prepared on a Cash