Kathy purchases a one-third interest in the KDP Partnership from Paul for $60,000. Just prio7r4)to the sale, Paul's outside and inside bases in KDP are $48,000. KDP's balance sheet includes the following: If KDP has a §754 election in place, what is Kathy's special basis adjustment?

Question

Kathy purchases a one-third interest in the KDP Partnership from Paul for $60,000. Just prio7r4)to the sale, Paul's outside and inside bases in KDP are $48,000. KDP's balance sheet includes the following:  If KDP has a §754 election in place, what is Kathy's special basis adjustment?

Quizplus · Accepted Answer

Because Kathy purchases a one-third interest in the KDP Partnership for $60,000 and Paul's outside and inside bases are $48,000, there is a $12,000 difference. Since the partnership has a §754 election in place, Kathy's special basis adjustment is equal to this difference, or $12,000.

Kathy Purchases a One-Third Interest in the KDP Partnership from Paul