In 2021, Autumn Partnership distributes the following assets to Spring Dupont (a partner in the partnership) in a proportionate, liquidating distribution:

• Office furnishing (fair market value of $100,000 and basis to partnership of $30,000)
• $40,000 of cash
• Inventory (fair market value of $100,000 and basis to partnership of $20,000).

Prior to the distribution Spring Dupont had an outside basis in the Autumn Partnership of $200,000.

a. How much gain or loss will Spring Dupont recognize from this distribution?

b. How much gain of loss will Autumn Partnership recognize from this distribution?

c. What is Spring Dupont's basis in the office furnishings? What is Spring Dupont's basis in the inventory?

d. What is Spring Dupont's outside basis in the partnership following the distribution?

e. How would your answers to the above questions change if the distribution were a non- liquidating distribution?

Answer rating: 100% (QA)

a Spring Dupont will recognize a gain of 10000 on the office furnishings 100000 FMV 90000 basis Spri... View the full answer