Katrina is a one-third partner in the KYR Partnership (calendar year-end).Katrina decides she wants to exit the partnership and receives a proportionate distribution to liquidate her partnership interest on January 1.The partnership has no liabilities and holds the following assets as of January 1:
$\begin{array}{lrr}
& {\text { Basis }} & \text { FMV } \
\text { Cash } & \$ 180,000 & \$ 180,000 \
\text { Accounts receivable }& -0- & 240,000 \
\text { Stock investment } & 75,000 & 120,000 \
\text { Land } &\underline{ 300,000 }& \underline{360,000} \
\text { Totals } & \underline{\$ 555,000} &\underline{ \$ 900,000}
\end{array}$ Katrina receives one-third of each of the partnership assets.She has a basis in her partnership interest of $250,000.What is the amount and character of any recognized gain or loss to Katrina? What is Katrina's basis in the distributed assets?

Question

Katrina is a one-third partner in the KYR Partnership (calendar year-end).Katrina decides she wants to exit the partnership and receives a proportionate distribution to liquidate her partnership interest on January 1.The partnership has no liabilities and holds the following assets as of January 1:
 $\begin{array}{lrr}
& {\text { Basis }} & \text { FMV } \
 \text { Cash } & \$ 180,000 & \$ 180,000 \
\text { Accounts receivable }& -0- & 240,000 \
\text { Stock investment } & 75,000 & 120,000 \
\text { Land } &\underline{ 300,000 }& \underline{360,000} \
\text { Totals } & \underline{\$ 555,000} &\underline{ \$ 900,000}
\end{array}$  Katrina receives one-third of each of the partnership assets.She has a basis in her partnership interest of $250,000.What is the amount and character of any recognized gain or loss to Katrina? What is Katrina's basis in the distributed assets?

Quizplus · Accepted Answer

The Answer of Katrina is a one-third partner in the KYR Partnership (calendar year-end).Katrina decides she wants to exit the partnership and receives a proportionate distribution to liquidate her partnership interest on January 1.The partnership has no liabilities and holds the following assets as of January 1:
 $\begin{array}{lrr}
& {\text { Basis }} & \text { FMV } \
 \text { Cash } & \$ 180,000 & \$ 180,000 \
\text { Accounts receivable }& -0- & 240,000 \
\text { Stock investment } & 75,000 & 120,000 \
\text { Land } &\underline{ 300,000 }& \underline{360,000} \
\text { Totals } & \underline{\$ 555,000} &\underline{ \$ 900,000}
\end{array}$  Katrina receives one-third of each of the partnership assets.She has a basis in her partnership interest of $250,000.What is the amount and character of any recognized gain or loss to Katrina? What is Katrina's basis in the distributed assets?

Katrina Is a One-Third Partner in the KYR Partnership (Calendar