Joshua is a 30% partner in a partnership. His basis at the beginning of the year was
Question:
Joshua is a 30% partner in a partnership. His basis at the beginning of the year was $13,000. During the current year, the partnership had operating losses of $40,000. In addition, the partnership had long-term capital gains of $15,000 and Sec. 1231 losses of $10,000. The partnership's liabilities also increased by $20,000 during the year. Finally, the partnership distributed cash and property to its partners. Joshua received the following:
Joshua's Cash and Property Distribution
Basis FMV
Cash $1,800
Machinery $3,100 $5,300
Inventory $2,800 $4,600
Land $4,900 $7,150
Determine the basis and return effects for Joshua.
How would your answer change if the partnership's liabilities decreased by $20,000 instead of increased by $20,000?
Financial Reporting and Analysis
ISBN: 978-0078025679
6th edition
Authors: Flawrence Revsine, Daniel Collins, Bruce, Mittelstaedt, Leon