Logan's basis in his partnership interest is $20,000 when he receives a pro rata nonliquidating distribution from the partnership of $22,000 cash and inventory with a basis of $2,000 and fair market value of $3,000).What is Logan's basis for the inventory he received?
A)0
B)$1,000
C)$2,000
D)$3,000

Question

Quizplus · Accepted Answer

Logan's basis in the inventory is reduced to zero because the cash distribution exceeds his basis in the partnership interest, leaving no basis to allocate to the inventory.

Logan's Basis in His Partnership Interest Is $20,000 When He