Dissolution of partnership firm

Tax queries 318 views 5 replies

Sir/Mam

When AB & Co. i.e. Partnership firm having 2 Partners i.e. A and B,  is dissolved then on the date of dissolution all the assets and liabilities are tranferred to a Mr. A.

Then what are the Tax implication in the hand of partnership firm when it has trasferred its depreciable assets, debtors, advances and creditors to Mr. A.

and how to compute it.

 

Kindly Resolve my Query as soon as possible.

Replies (5)
section 45(4) : transfer of cap asset by firm to its partners on dissolution of firm it shall be treated as transfer and capital gain shall be chargeable in hands of firm.
fair market value of the asset on date of dissolution shall be taken as full value of consideration.

Like in Balance Sheet , Car having WDV of 150000

computation would be ?

FMV being sale consideration - 200000

less: - WDV of Car -              150000

STCG 50000 as per sec 50

kindly correct if i am wrong

yes this should be the treatment
if any transfer expenses shall be deducted from consideration value.

can i apply provisions of section 50B here 

and calculate capital gain as under

lumpsump consideration minus net worth 

no 50B is applicale where a business segment is transferred. it is not the case of transfer of business segment.


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