Bill has basis in his partnership interest of $15,000 before any distributions.The partnership made the following distributions to Bill: $5,000 in cash,a computer system worth $1,000 in which the partnership has basis of $7,000,and a truck worth $10,000 in which the partnership has basis of $21,000.Bill:

Question

Quizplus · Accepted Answer

Bill's basis in his partnership interest is reduced by the cash distribution first, then by the basis of the property distributed. After the $5,000 cash distribution, his basis is $10,000. The basis of the computer system is $7,000, reducing his basis to $3,000. The truck's basis is $21,000, but Bill's remaining basis is only $3,000, so his basis in the truck is $3,000, and his partnership interest basis is zero.

Bill Has Basis in His Partnership Interest of $15,000 Before