In a proportionate liquidating distribution in which the partnership is liquidated, Bill received cash of $120,000, inventory (basis of $6,000, fair market value of $8,000), and a capital asset (basis and fair market value of $16,000). Immediately before the distribution, Bill's basis in the partnership interest was $90,000.

a. How much gain or loss will Bill recognize on the distribution?
b. What is Bill's basis in the inventory and the capital asset?

Question

a. How much gain or loss will Bill recognize on the distribution?
b. What is Bill's basis in the inventory and the capital asset?

Quizplus · Accepted Answer

The Answer of In a proportionate liquidating distribution in which the partnership is liquidated, Bill received cash of $120,000, inventory (basis of $6,000, fair market value of $8,000), and a capital asset (basis and fair market value of $16,000). Immediately before the distribution, Bill's basis in the partnership interest was $90,000.

a. How much gain or loss will Bill recognize on the distribution?
b. What is Bill's basis in the inventory and the capital asset?

In a Proportionate Liquidating Distribution in Which the Partnership Is