A partnership has the following assets and liabilities. The book basis and tax b

Question

A partnership has the following assets and liabilities. The book basis and tax basis are the same amount.

Asset                                     Basis                         Value

Machine                                10,000                       30,000

Accounts Payable                  8,000                          8,000

Note payable                         15,000                        15,000

Total                                       33,000                       53,000

If the note payable is the debt on the machine, what is the amount of the minimum gain?

Explanation / Answer

If the note payable is the debt on the machine, then minimm gain = 20000-8000 = $12,000

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