Michelle has a basis in her partnership interest of $85,000. In a proportionate liquidating distribution of the
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Michelle has a basis in her partnership interest of $85,000. In a proportionate liquidating distribution of the partnership, Michelle receives $5,000 cash and a car (a § 1231 asset to the partnership) having a basis of $20,000 to the partnership and a fair market value of $30,000. Disregard any potential depreciation recapture on the car.
a. How much gain or loss, if any, may Michelle recognize on the distribution?
b. What basis will Michelle take in the car?
c. Suppose Michelle's 18-year-old son uses the car for his personal use for one year before Michelle sells it for $28,000.
- (1) Does Michelle recognize any gain or loss? If so how much?
Related Book For
Fundamentals of Taxation 2015
ISBN: 9781259293092
8th edition
Authors: Ana Cruz, Michael Deschamps, Frederick Niswander, Debra Prendergast, Dan Schisler, Jinhee Trone
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