Daniela is a 25% partner in the JRD Partnership. On January 1, JRD makes a proportionate distribution of $16,000 cash, inventory with a $16,000 fair value (inside basis $8,000), and accounts receivable with a fair value of $8,000 (inside basis of$12,000) to Daniela. JRD has no liabilities at the date of the distribution. Daniela's basis in JRD is $20,000. What is Daniela's basis in the distributed inventory and accountsreceivable?

Question

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Daniela's basis in the partnership is $20,000. After receiving $16,000 in cash, her remaining basis is $4,000. This remaining basis is allocated to the inventory and accounts receivable based on their inside basis, which totals $20,000 ($8,000 for inventory and $12,000 for accounts receivable). The allocation is $2,000 to inventory and $2,000 to accounts receivable.

Daniela Is a 25% Partner in the JRD Partnership