The December 31,2008,balance sheet of the calendar-year JKL Partnership reads as follows.

Each partner shares in 1/3 of the partnership capital,income,gain,loss,deduction and credit.On December 31,2008,Jan sells her 1/3 partnership interest to Jennifer for $43,000 cash.Assume the partnership makes a § 754 election for 2008.
a.What is the amount of Jennifer's "step-up" adjustment under § 743(b)?
b.If the nondepreciable capital asset is sold the next year for $120,000, determine the amount of gain that Jennifer will recognize on her tax return because of the sale.

Question

The December 31,2008,balance sheet of the calendar-year JKL Partnership reads as follows.
  
Each partner shares in 1/3 of the partnership capital,income,gain,loss,deduction and credit.On December 31,2008,Jan sells her 1/3 partnership interest to Jennifer for $43,000 cash.Assume the partnership makes a § 754 election for 2008. 
a.What is the amount of Jennifer's "step-up" adjustment under § 743(b)?
b.If the nondepreciable capital asset is sold the next year for $120,000, determine the amount of gain that Jennifer will recognize on her tax return because of the sale.

Quizplus · Accepted Answer

The Answer of The December 31,2008,balance sheet of the calendar-year JKL Partnership reads as follows.
  
Each partner shares in 1/3 of the partnership capital,income,gain,loss,deduction and credit.On December 31,2008,Jan sells her 1/3 partnership interest to Jennifer for $43,000 cash.Assume the partnership makes a § 754 election for 2008. 
a.What is the amount of Jennifer's "step-up" adjustment under § 743(b)?
b.If the nondepreciable capital asset is sold the next year for $120,000, determine the amount of gain that Jennifer will recognize on her tax return because of the sale.

The December 31,2008,balance Sheet of the Calendar-Year JKL Partnership Reads