Atiqa receives a nonliquidating distribution of land from her partnership.The partnership purchased the land five years ago for $20,000.At the time of the distribution,it is worth $28,000.Prior to the distribution,Atiqa's basis in her partnership interest is $37,000.Atiqa's basis in the distributed land and her post-distribution basis in her partnership interest are

Question

Quizplus · Accepted Answer

D)No gain is recognized by the partner or the partnership due to the distribution,and the partner will take over the partnership's adjusted basis of $20,000 in the land.Atiqa's partnership basis will be reduced to $17,000 ($37,000 predistribution basis - $20,000 basis in land).

Atiqa Receives a Nonliquidating Distribution of Land from Her Partnership