A partnership's records show: $\begin{array}{ll}&\text { Inside Basis }&FMV\
\text { Cash }&\$ 4,000 & \$ 4,000 \
\text { Inventory }&16,000 & 30,000 \
\text { Land }&8,000 & 20,000\
\text { Equipment }&72,000&60,000\
\text { Total assets }&\$100,000&\$114,000
\end{array}$ D's basis in her 25% interest in this partnership is $26,000.She receives 25 percent of all partnership assets as a liquidating distribution.Compute D's basis in each distributed asset.

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D's total basis in the partnership is $26,000. She receives 25% of each asset's inside basis: Inventory ($16,000 x 25% = $4,000), Land ($8,000 x 25% = $2,000), Equipment ($72,000 x 25% = $18,000). The remaining $2,000 of her basis is allocated to the land, increasing its basis to $3,000.

A Partnership's Records Show D's Basis in Her 25% Interest in This Partnership Is