Case Problem
• Whar are the Federal Income Tax consequences to the Gemstone Galleries partnership of each of the following three withdrawals of Alicia from the partnership:
o Derrick and Jacob assume Alicia's share of partnership liabilities and pay her 80,000 per year for next three years plus interest?
o The partnership holds Alicia's harmless against the liabilities of the partnership and pays her 80,000 per year for the next three years plus interest?
o The partnership holds Alicia harmless against the liabilities of the partnership and distributes the George Woodman Collection to her?
• What is Alicia's basis in the partnerships that she inherited from Annabelle?
• If option 1a is elected by Alicia, what is the basis in the partnership for Derrick and Jacob?
• If option 1b is elected by Alicia, what is the partnership's basis in its assets?
• Should Sec. 754 be elected so Sec. 743 can be applied if option 1b is elected?
• If option 1c is elected by Alicia, what is gain recognized by the partnership?
The response should include a reference list. Using double-space, Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.
Attachment:- Case.rar