Josh has a 25% capital and profits interest in the calendar-year GDJ Partnership. His adjusted basis for his partnership interest on October 15 of the current year is $300,000. On that date, the partnership liquidates and makes a proportionate distribution of the following assets to Josh.

Partnership’s Basis in Asset	Asset’s Fair Market Value
Cash Inventory	$ 70,000 120,000	$ 70,000 150,000

Calculate Josh’s recognized gain or loss on the liquidating distribution, if any.

How would your answer to #a., above, change if the partnership also distributed a small parcel of land it had held for investment to Josh? Assume the land has a $5,000 adjusted basis (FMV is $8,000) to the partnership.

Clearly identify the requirements being addressed. Show all calculations within the cells of an Excel spreadsheet.

Answer rating: 100% (QA)

PART A Adjusted Basis 300000 Partnerships Basis of cash 70000 Par... View the full answer