Nathan's basis for his interest in the Nabors Partnership was $24,000.In complete liquidation of his interest, Nathan received cash of $4,000 and investment land having a fair market value of $40,000.Nabors Partnership's adjusted basis for this land was $15,000.Nathan's basis for this land is:
A)$9,000
B)$15,000
C)$16,999
D)$20,000

Question

Quizplus · Accepted Answer

Nathan's basis for the land is calculated by subtracting the cash received from his original basis in the partnership and then adding any gain recognized due to the receipt of cash. His original basis is $24,000. He received $4,000 in cash, reducing his basis in the partnership to $20,000, which becomes his basis in the land since there's no information indicating a need to recognize additional gain for the basis calculation.

Nathan's Basis for His Interest in the Nabors Partnership Was