Partner X is distributed the following in complete liquidation of her partnership interest: Basis FMV Cash $30,000
Question:
Partner X is distributed the following in complete liquidation of her partnership interest:
Basis FMV
Cash $30,000 $30,000
Inventory $30,000 $40,000
Land A $35,000 $20,000
$95,000 $90,000
X had a basis in her partnership interest of $75,000, so the land’s basis was reduced by $20,000 and had only a $15,000 basis in X’s hands. The remaining YZ partnership (which did have a Code Sec. 754 elections in effect) had the following remaining assets:
Basis FMV
Cash $40,000 $40,000
Inventory $30,000 $45,000
Unrealized Receive. $50,000 $45,000
Land B $25,000 $40,000
Building $45,000 $10,000
i.How much of an adjustment to basis would each of the partnership assets have?
ii. How much of an adjustment to basis would each of the partnership assets have if X’s basis in her partnership interest had been $140,000?
Taxation Of Individuals And Business Entities 2021
ISBN: 9781260247138
12th Edition
Authors: Brian Spilker, Benjamin Ayers, John Barrick, Troy Lewis, John Robinson, Connie Weaver, Ronald Worsham