A is a partner in Partnership AB. The assets of Partnership AB consist solely of cash and
Question:
A is a partner in Partnership AB. The assets of Partnership AB consist solely of cash and capital assets, which were all purchased by the partnership. A has an outside basis of $700. A has a capital account of $1,200. A will receive an operating distribution from Partnership AB. That distribution will consist of cash of $400 and Asset #1. Asset #1 has a value of $600, an inside basis to Partnership AB of $400, and a holding period to Partnership AB of 2 years. For purposes of these problems, assume that IRC sections 751, 737, and 736 do not apply. See IRC section 731(d).
Does A recognize any gain or loss on her receipt of the cash and Asset#1?
What is A’s basis in Asset #1 after receiving it?
What is A’s outside basis in her partnership interest in Partnership AB receiving the cash and Asset #1?
What is A’s holding period in Asset #1?
What is A’s capital account in Partnership AB after receiving the distribution of cash and Asset #1?
Expert Answer:
IRC section 7 31 c applies when the distribution consists of cash and property ... View the full answer
