Partnership Taxation: Partnership Distributions - Lesson 2 скачать в хорошем качестве

Partnership Taxation: Partnership Distributions - Lesson 2

In this video, 4.05 – Partnership Taxation: Partnership Distributions – Lesson 2, Roger Philipp, CPA, CGMA, continues from Lesson 1 of partnership distributions. Roger first goes into some examples of liquidating partnership distributions, then summarizes the rules for accounting for partnership distributions. When a partner receives a distribution from a partnership, either in the form of cash or property, there are some key questions to answer: What is the partner’s basis in the received asset? How does the distribution affect the partner’s outside basis in the partnership? What amount of income, if any, must the partner recognize as a result of the distribution? The rules for answering these questions that arise from partnership distributions change according to whether a particular distribution consisted of cash, property, or both. Differences between current distributions (also known as non-liquidating distributions) and liquidating distributions must also be considered. A partner’s outside basis must be zero after accounting for the receipt of a liquidating distribution. No gain or loss can be recorded upon the receipt of a property distribution. If the property distribution is non-liquidating, the partner picks up the property at the lower end of inside or outside basis; if the property distribution is liquidating, the partner picks up the property at outside basis, which reduces the partner’s basis to zero. If a distribution involves both cash and property, the effects of cash are considered first. Connect with us: Website: https://accounting.uworld.com/cpa-rev... Blog: https://accounting.uworld.com/blog/cp... Twitter:   / uworldrogercpa   Facebook:   / uworldrogercpareview   Instagram:   / uworldrogercpareview   Pinterest:   / uworldrogercpareview   LinkedIn:   / uworld-roger-cpa-review   Are you accounting faculty looking for FREE CPA Exam resources in the classroom? Visit our Professor Resource Center: https://accounting.uworld.com/cpa-rev... Video Transcript Sneak Peek: Let's do this again but now let's look at instead of Non-liquidating let's look at a Liquidating distribution. So basically what it means is the Partner got maybe kicked out so therefore, their ownership has to go to zero. Right? Their ownership, which is their outside basis, has to go to zero. So let's start over here. This is called a Liquidating Distribution. Liquidating Distribution. So my outside basis is 10. First case, I'm gonna get cash of two and then 15. So I'm gonna get cash of two. But this has to go to zero so I have an eight dollar loss. That's gonna be an eight dollar loss. Mmm...okay. That's gonna be a capital loss. Instead, I have a basis of 10, I get 15. It has to go to zero. I have a five dollar capital gain. Mmm...okay Property. Outside basis 10. Here is the inside basis, again that is the basis of the property inside the Partnership to the Partnership. It's either two or it's 15. When I received this property this has to go to zero. What does that mean? It means you always pick it up for, what? The outside basis. Why? Because you cannot have a gain or loss on property. Remember, no gain or loss on property. So what is that saying? No gain or loss on property. You could have a gain or loss on cash. Cash is king, cash is cash. But no gain or loss on property. If it is a Liquidating Distribution you're withdrawing, you're leaving "Bye-bye!" Right? You're going bye-bye which means this has to go to zero. It's gotta go to zero? What does that mean? It means that if its property, forget inside! Always pick it up for outside basis. What if it's Non-Liquidating? Then you pick it up for the lower of inside or outside. What's lower? Ten or two? Two. So you still have some basis left. What's lower? Ten or 15? Ten. Boom. Got to go to...'cause if you put 15 you'd have a gain and no gain on property. Let's look in our notes. You'll see an example of this in your notes. Pretty straightforward. It says "Non-liquidating Distributions of cash and then of property." And you can see there is there a gain or loss. And then you'll see if the basis is eight. That's the outside basis. There you have a gain on cash but no gain on property. Again, zero zero. It says "a Liquidating Distribution is, in some ways, simpler since the Partner's basis has to go to zero. The difference between cash and property is as follows. Cash, inventory, unrealized receivable distributions, total of cash, unrealized receivable depreciation distributed to the Partner compared to the Partner's basis. And then you could have a gain or loss. Property Distributions are always equal to the Partner's basis."