Bart has a partnership interest with a $32,000 basis. He receives a current distribution of $6,000 cash, unrealized receivables (FMV $9,000, basis $10,000), inventory (FMV $8,000, basis $4,000), investment land (FMV $7,000, basis $4,000), and building (FMV $20,000, basis $8,000). No depreciation recapture applies with respect to the building. The partners' relative interests in the Sec. 751 assets do not change as a result of the current distribution. Bart's basis in the building is

Question

Quizplus · Accepted Answer

Bart's basis in the building is determined by reducing his partnership interest basis by the cash and the basis of other distributed properties before allocating the remaining basis to the building. After accounting for the cash and other distributed properties, Bart's remaining basis is allocated to the building, which is $8,000.

Bart Has a Partnership Interest with a $32,000 Basis