Randy owns a one-fourth capital and profits interest in the calendar year RUSR Partnership. His adjusted basis for his partnership interest was $200,000 when he received a proportionate nonliquidating distribution of the following assets.
Partnership's Basis in Asset Asset's Fair Market Value
Cash
Inventory
$120,000
60,000
$120,000
90,000

a. Calculate Randy's recognized gain or loss on the distribution, if any. Explain.
b. Calculate Randy's basis in the inventory received.
c. Calculate Randy's basis for his partnership interest after the distribution.

Question

Randy owns a one-fourth capital and profits interest in the calendar year RUSR Partnership. His adjusted basis for his partnership interest was $200,000 when he received a proportionate nonliquidating distribution of the following assets.
Partnership's Basis in Asset Asset's Fair Market Value
Cash
Inventory
$120,000
60,000
$120,000
90,000

a. Calculate Randy's recognized gain or loss on the distribution, if any. Explain.
b. Calculate Randy's basis in the inventory received.
c. Calculate Randy's basis for his partnership interest after the distribution.

Quizplus · Accepted Answer

The Answer of Randy owns a one-fourth capital and profits interest in the calendar year RUSR Partnership. His adjusted basis for his partnership interest was $200,000 when he received a proportionate nonliquidating distribution of the following assets.
Partnership's Basis in Asset Asset's Fair Market Value
Cash
Inventory
$120,000
60,000
$120,000
90,000

a. Calculate Randy's recognized gain or loss on the distribution, if any. Explain.
b. Calculate Randy's basis in the inventory received.
c. Calculate Randy's basis for his partnership interest after the distribution.

Randy Owns a One-Fourth Capital and Profits Interest in the Calendar