Mark receives a nonliquidating distribution of $10,000 cash and a parcel of land having an adjusted basis of $18, fair market value of $25,000.
a. Mark's basis in his partnership interest prior to the distribution is $50,000.
(1) How much income will the partnership recognize due to the distribution?
(2) How much income will Mark recognize due to the distribution?
(3) What is Mark's basis in his partnership interest after the distribution?
(4) What is Mark's basis in the land?
b. Assume Mark's basis in his partnership interest is instead $22,000 and redetermine the responses to question through (4).

Question

Quizplus · Accepted Answer

The Answer of Mark receives a nonliquidating distribution of $10,000 cash and a parcel of land having an adjusted basis of $18, fair market value of $25,000.
a. Mark's basis in his partnership interest prior to the distribution is $50,000.
(1) How much income will the partnership recognize due to the distribution?
(2) How much income will Mark recognize due to the distribution?
(3) What is Mark's basis in his partnership interest after the distribution?
(4) What is Mark's basis in the land?
b. Assume Mark's basis in his partnership interest is instead $22,000 and redetermine the responses to question through (4).

Mark Receives a Nonliquidating Distribution of $10,000 Cash and a Parcel