The aim in this case was not to evaluate the size of the recognized loss
, but rather to analyze whether or not the companies recognized such losses and which factors can explain this procedure.
No court has yet recognized loss
of language and culture as compensable.
When the entity has recognized loss
, and impairment loss, the auditor should gather evidence supporting the amount of the impairment adjustment recorded and determine whether the entity has appropriately followed generally accepted accounting principles.
This part also presents the amount of the recognized loss
, if any, and the amount of the recovery of any previously recognized loss
In this case, the partnership will reduce the tax basis of the remaining assets in the partnership by the amount of the redeeming partner's recognized loss
, or by the step-up in basis that the redeeming partner receives in the distributed property.
If B's basis in A's stock had been increased in year 2, the gain recognized on the sale of A's stock in year 3 would have been decreased (or the recognized loss
increased) by the recaptured income.
A distribution may result in a recognized loss
to a partner only where the partner's interest in the partnership is being completely liquidated and he or she receives only cash, unrealized receivables as defined in IRC Sec.
734(d), there is a substantial basis reduction when a partnership interest is liquidated, if the sum of the (1) redeemed partner's recognized loss
and (2) portion of the distributed property's substituted basis in the redeemed partner's hands that exceeds the partnership's adjusted basis, is more than $250,000.
734(d); thus, PRS has to reduce the basis of its assets in an amount equal to A's recognized loss
Basis of P in S stock Investment $ 10,000,000 Year 1 profit 1,000,000 Year 2 loss (500,000) Basis at end of Year 2 $ 10,500,000 Loss Disallowance Recognized loss
($ 2,500,000) Calculation of Limitation 1.