Exam Question 8 of 35 Select the best answer. The LMN Partnership has the follow

Question

Exam Question 8 of 35 Select the best answer. The LMN Partnership has the following assets and liabilities before any reduction for payments on the liabilities. Assume the book basis and tax basis are the same amount. year-end principal BasisVal 300,000 $400,000 Assets Nonrecourse debt $500,000 $500,000 If the partners have a deficit in their capital accounts of ($100,00o), what is the amount of minimum gain chargeback if partnership taxable loss for the year is ($20,000) and the liabilities are reduced by $250,000? o A. So OB. $20,000 C. $50,000 O D. $100,000 , Question Q8 100% Complete Exit & Resume Later

Explanation / Answer

1.Exam question 8 of 35 answer is $0 that is option A.

Because

Debt is less than the basis of the asset.

2.Exam question 9 of 35 answer is option B.

Explanation.:

The 754 election will make the basis of the new partner, $3,000 in cash and $5,000 in securities.

If they sell for $27,000, then $3,000 is allocable to V.

$5,000 basis - $3,000 in proceeds=

a $2,000 loss.

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