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This is an accounting question. I found the same question in a document posted on this site. However I can't find a way to just search for this...
This is an accounting question. I found the same question in a document posted on this site. However I can't find a way to just search for this because it's probably already been answered.
The WXYZ partnership has the following 2 assets before its liquidating distribution to partner W. Assets of accounts receivable ($0 basis and $20,000 value), and capital assets ($12,000 basis and $20,000 value), and total ($12,000 basis and $40,000 value). If partner W with a $3000 basis in her 25% interest receives $10,000 of capital assets, how much income must she recognize as a result of the liquidation and is it capital gain or ordinary income?
