In a syndication,when cash is distributed from an investor's partnership basis how is the new basis calculated?
A)The cash distribution is added to the investor's capital gain
B)The cash distribution is subtracted from the investor's capital gain
C)The cash distribution is added to the investor's partnership basis
D)The cash distribution is subtracted from the investor's partnership basis

Question

Quizplus · Accepted Answer

When cash is distributed from an investor's partnership basis, the new basis is calculated by subtracting the cash distribution from the investor's partnership basis. This is because the investor's partnership basis is reduced by the amount of cash distributed, as it is no longer part of the investment in the partnership.

In a Syndication,when Cash Is Distributed from an Investor's Partnership