The December 31, 2014, 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, 2014, Jan sells her 1/3 partnership interest to Jennifer for $43,000 cash. Assume the partnership makes a § 754 election for 2014.
a. What is the amount of Jennifer's "stepup" 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.
Definitions:
Unconscious Forces
Psychological factors that influence human behavior and decision-making without the individual's conscious awareness, a concept profound in psychoanalytic theory.
Libido
A term used to describe one's sexual drive or desire for sexual activity.
Sexual Frequency
A term that refers to the number of times sexual activity occurs within a specific time period.
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