how did they get 9400

A) Trane does not recognize any gain or loss on the distribution. The liquidation is of 30% partner and as such does not trigger a tachnical termionation of the partnership. Trane's basis in its remaining property is unaffected by the distribution since there in no section 754 in effect. B) First, AJ must determine his basis in Trane as of the distribution. At the beginning of the year, his basis is $73, 000. Trane earns $42, 000 during the period of which 30% is allocable to AJ. He increses his basis by his by his $12, 600($42, 000 x 30%) sahre of Trane's income. Thus, as of the distribution, Aj's basis in Trane $85, 600 $73, 000 + $12, 600. Next, AJ accounts for the deemed cash distribution realting to his reduction of Trane's $50000 debt is $15, 000 AJ reduce his outside basis by the $15000 leaving a basis of $70, 600 to allocate to the distributed assets. He does not reciognize any gain or loss on the distribution beacuse the deemed cash distribution does not exceed his basis in Trane. C) AJ calculates his basis in the distributed assets as follows: 1.First he assigns a carryover basis to the distributed assets: Inventory $55000 Land ($25000 in step 2-$9400) $15600