Question: Liquidating Distribution - Proportionate. Immediately prior to its termination, the FN Partnership owned the following assets: Inside Basis Outside Basis Cash $40,000 $40,000 Equipment $100,000

Liquidating Distribution - Proportionate.

Immediately prior to its termination, the FN Partnership owned the following assets:

	Inside Basis	Outside Basis
Cash	$40,000	$40,000
Equipment	$100,000	$70,000
Accumulated Depreciation	$(60,000)
Capital Asset	$10,000	$30,000

F, a 50% partner, receives a one-half interest in each of the assets in complete liquidation of her partnership interest. F's outside basis in this interest is $45,000.

a. Calculate F's basis for each asset received in the distribution.

b. How would your answer to (a) change if F's outside basis in her partnership interest if $60,000?

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