Becky has a $24,000 basis in her partnership interest. She receives a current distribution of $4,000 cash, unrealized receivables with a basis of $12,000 and an FMV of $16,000, and land held as an investment with a basis of $3,000 and an FMV of $8,000. The partners' relative interests in the Sec. 751 assets do not change as a result of the current distribution. The basis of her partnership interest following the distribution is
A)$5,000.
B)$1,000.
C)$0.
D)($4,000).

Question

Quizplus · Accepted Answer

Becky's basis in her partnership interest is reduced by the cash received ($4,000) and the basis of the unrealized receivables ($12,000) and land ($3,000), totaling $19,000. Therefore, her new basis is $24,000 - $19,000 = $5,000.

Becky Has a $24,000 Basis in Her Partnership Interest