1. Partner has a $40,000 outside basis in her partnership interest. In a pro-rata operating distribution to the partners, the Partner receives two assets. Asset #1 has a value of $10,000 and a basis for the partnership of $40,000. Asset #2 has a value of $10,000 and a basis for the partnership of $20,000. What basis will the partner take in each property under Internal Revenue Code Section 7320) if: 
2. 
   
3. (a) Asset #1 is an inventory item and Asset #2 is a capital asset? 
4. 
   
5. (b) Asset #2 is an inventory item and Asset #1 is a capital asset? 
6. 
   
7. (c) Both properties are inventory items? 
8. 
   
9. (d) Both properties are capital assets? 
10. 
    
11. (e) Suppose Asset #1 has a value of $60,000 and a basis of $40,000 to the partnership and Asset #2 has a value of $50,000 and a basis of $20,000. 
12. 
    
13. What basis will Partner take in each property under Internal Revenue Code Section 7320) if she receives both properties in a pro-rata operating distribution and both properties are inventory items?

Answer rating: 100% (QA)

a 40000 outside basis 40000 basis for inventory asset 1 0 basis for capit... View the full answer