John received a proportionate nonliquidating distribution of $10,000 cash and inventory with a zero basis and a fair market value of $12,000 from a partnership in which he has a basis of $8,000 a What are the tax effects of these distributions b How would your answer change if this was a liquidatin...

a Johns 10000 cash distribution reduces his partnership basis to zero and he must re ...

John received a proportionate nonliquidating distribution of $10,000 cash and inventory with a zero basis and a

Question:

John received a proportionate nonliquidating of $10,000 cash and inventory with a zero basis and a fair market value of $12,000 from a in which he has a basis of $8,000.
a. What are the tax effects of these distributions?
b. How would your answer change if this was a liquidating How would your answers change on the nonliquidating and liquidating distributions if his basis in the was $15,000?
Distribution
The word "distribution" has several meanings in the financial world, most of them pertaining to the payment of assets from a fund, account, or individual security to an investor or beneficiary. Retirement account distributions are among the most... Partnership
A legal form of business operation between two or more individuals who share management and profits. A Written agreement between two or more individuals who join as partners to form and carry on a for-profit business. Among other things, it states...