Don’t know how to calculate the gain for my client partner A and partner B. Client was a 1/3 partner in rental activity. Bought out 2 partners in 2005 and deferred the gain and another person bought ½ of partnership at the time. Accountant at the time elected section 754 and stepped up the basis of property. Here are the facts.
Original basis of property $112,500 bought 8/1/98 sold 2/3 interest 5/31/05 accumulated depreciation $27,612
2005 buyout:
2 partners claimed gain:
Gross Sales: $135,000
Cost or other basis plus expense of sale: $78,022
Depreciation allowed or allowable: 18,408
Adjusted basis: 59,614
Total gain: 75,386
Two partners 50/50
Stepped-up basis $202,500 5/31/05, accumulated depreciation $32,215. Sold property 10/21/2009 for $243,000.
How do I calculate each partner’s gain in this mess?
Original basis of property $112,500 bought 8/1/98 sold 2/3 interest 5/31/05 accumulated depreciation $27,612
2005 buyout:
2 partners claimed gain:
Gross Sales: $135,000
Cost or other basis plus expense of sale: $78,022
Depreciation allowed or allowable: 18,408
Adjusted basis: 59,614
Total gain: 75,386
Two partners 50/50
Stepped-up basis $202,500 5/31/05, accumulated depreciation $32,215. Sold property 10/21/2009 for $243,000.
How do I calculate each partner’s gain in this mess?